Smiles Entertainment Had the Following Accounts and Balances at December

Smiles Entertainment had the following accounts and balances at December 31:
$\begin{array}{lrr}\text {Account}&\text {Debit}&\text {Credit}\\\text { Cash } & \$ 10,000 \\\text { Accounts Receivable } & 2,000 \\\text { Prepaid Insurance } & 2,400 \\\text { Supplies } & 1,000\\\text { Accounts Payable } & & \$ 5,000 \\\text { Common Stock } & & 4,000 \\\text { Retained Earnings } & & 900 \\\text { Service Revenue } & & 7,000 \\\text { Salaries Expense } & 500 & \\\text { Utilities Expense } & 1,000 & \\\text { Totals } & \$ 16,900 & \$ 16,900\end{array}$
Using the information in the table,calculate the company's reported net income for the period.

A) $1,100.
B) $4,000.
C) $8,500
D) $10,400.
E) $5,500.

Correct Answer:

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