Uring 2013, Parker Enterprises generated revenues of $60,000. The company's expenses were as follows: cost of goods sold of $30,000, operating expenses of $12,000 and a gain on the sale of equipment of $2,000. Parker's net income is A. $16,000. B. $30,000. C. $18,000. D. $20,000.

The correct answer is:

$20,000 (D.)

Explanation:

To calculate Parker's net income, we have to identify the transactions into income or expenditure, and calculate the difference between the total income and total expenditure, and this is done as follows:

Particulars                        Income ($)              Expenditure($)

generated revenues           60,000                   -

cost of goods sold                  -                          30,000

operating expenses               -                           12,000

gain on equipment sale         2,000                  -

Total                                      62,000                  42,000

Net income = Total income - Total Expenditure

= 62,000 - 42,000 = $20,000 (D.)

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