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Mars Corp. earned $10,000 in January, but Mars only received $7,000 of that and the other $3,000 will be received in February. Mars only expense was $2,500 for wages. Of this amount, Mars paid $1,000 during January and will pay the remaining $1,500 on February 1st. What is Mars net income for January?
A $7,500
B $6,000
C $9,000
D $4,500

Respuesta :

phamdiep1810

Answer:

Mars net income for January is A. $7,500

Explanation:

Following the Accrual accounting - an accounting method that revenue or expenses are recorded when a transaction occurs rather than when payment is received or made, in January:

Revenue of Mars Corp. was $10,000 and expense was $2,500. It does not depend on when the company received or made the payment.

Net income = Revenue - expense = $10,000 - $2,500 = $7,500

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