Tisdale Incorporated reports the following amounts in its December 31, 2024, income statement: Revenues of \$500,000, Cost of Goods Sold of \$300,000, and Operating Expenses of \$120,000. What is Tisdale's net income for the year ended December 31, 2024?

• A. \$120,000
• B. \$200,000
• C. \$80,000
• D. \$380,000

Answer: (C)

Verified step by step guidance

1. Step 1: Understand the formula for calculating net income. Net income is determined using the formula: Net Income = Revenues - Expenses. Expenses typically include Cost of Goods Sold (COGS) and Operating Expenses.
2. Step 2: Identify the values provided in the problem. Revenues are \$500,000, Cost of Goods Sold is \$300,000, and Operating Expenses are \$120,000.
3. Step 3: Add up all the expenses. Combine the Cost of Goods Sold and Operating Expenses to find the total expenses: Total Expenses = COGS + Operating Expenses.
4. Step 4: Subtract the total expenses from the revenues to calculate net income. Use the formula: Net Income = Revenues - Total Expenses.
5. Step 5: Verify the calculation conceptually. Ensure that the subtraction aligns with the definition of net income, which represents the profit remaining after all expenses are deducted from revenues.