Net Income is the amount of revenue a company earns after all expenses, taxes and gains and losses are subtracted from revenues. The purpose behind the Income Statement is to calculate the Net Income. All dividends are subtracted from Net Income which is then closed out to Retained Earnings at the end of the year.
Example:
Adequate Disclosure has the following financial information for the year 201X:
Advisory & Accounting Service Revenue: $100,000
Cost of Services Provided: $19,000
Interest Revenue: $7,000
Extraordinary Loss: $9,000 (Net after Tax)
Calculate Net Income:
