10 Calculating Net Income
Net income is what your business’s total profits are after subtracting your expenses. Net income might be negative, if your expenses are more than your profits. To be on sound financial footing, you want your net income to be positive. Business expenses include things like money spent on supplies, payroll, utilities, mortgage or rent, and taxes.
In order to calculate your net income, you take all your income, and then subtract all your expenses. Let’s say that your sales for the month totaled $14,685.52. Your mortgage payment was $1,764.23, your payroll expenses were $7,231.03, your utilities bill was $965.82, and your ingredients cost was $4,381.35. What was your net income for the month?
First we need to total your expenses. That would be $1,764.23 + $7,231.03 + $965.82 + $4,381.35 = $14,342.43.
Now, we take the total income and subtract the expenses: $14,685.52 – 14,342.43 = $343.09
The net income for the month is positive, which is good, but there is very little profit!
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Assignment
Purpose
To practice calculating the net income of a business.
Outcomes
By completing this assignment, you will be able to…
- Understand what net income means.
- Calculate the net income of given businesses.
Instructions
To complete this assignment…
- Read the problems carefully and find the correct answers.
- Be sure to show how you set up each problem.
Tips for Success
To help in the completion of this assignment, make sure to:
- Read each problem carefully and understand what it is asking.
- Include how you set up each problem in order to get credit.
Net Income Assignment
1) The sales of Jamal’s business for the month totaled $12,044.58. His mortgage payment was $2,673.98, his payroll expenses were $5,483.45, his utilities bill was $914.81, and his ingredients cost was $5,359.90. What was his net income for the month?
2) The sales of Kaylee’s business for the month totaled $21,080.57. Her rent payment was $1,725, her payroll expenses were $3,123.42, her purchase of new equipment cost her $421.56, and her ingredients cost was $769.34. What was her net income for the month?
3) The sales of Joachim’s business for the month totaled $34,087.42, and he earned a dividend of $346.98 on an investment. His rent payment was $2,075, his payroll expenses were $4,993.56, his maintenance costs were $1,347.58, and his ingredients cost was $986.67. What was his net income for the month?
4) The sales of Maria’s business for the month totaled $12,457.69, and she was given a small business grant of $5,000. Her mortgage payment was $1,346.68, her property tax was $1,489.01, her payroll expenses were $13,098.42, her utilities bill was $798.42, and her ingredients cost was $1,094.26. What was her net income for the month?
5) The sales of Anderson’s business for the month totaled $28,086.45. His rent payment was $2,025, his payroll expenses were $11,975.46, his utilities bill was $579.43, and his ingredients cost was $2,005.68. What was his net income for the month?
6) The sales of Naira’s business for the month totaled $15,096.75, and she earned a dividend of $369.42 on an investment. Her rent payment was $1,975, her utilities bill was $679.53, her payroll expenses were $9,769.50, and her ingredients cost was $4,598.31. What was her net income for the month?
7) The sales of Hussein’s business for the month totaled $14,986.53, and he received a small business grant of $7,500. His rent payment was $2,050, his maintenance bill was $1,354.67, his payroll expenses were $10,809.01, and his ingredients cost was $879.98. What was his net income for the month?
8) The sales of Zoe’s business for the month totaled $24,087.42, and she earned a dividend of $568.70 on an investment. Her mortgage payment was $2,312.43, her utilities bill was $678.54, she bought some new furniture that cost $768.42, her payroll expenses were $6,798.42, and her ingredients cost was $13,435.68. What was her net income for the month?
9) The sales of Hudson’s business for the month totaled $18,548.41, and he received a rent payment from the adjoining shop of $2,035. His mortgage payment was $3,067.47, his taxes were $312.12, his utilities bill was $798.56, his payroll expenses were $5,097.43, and his ingredients cost was $9,807.54. What was his net income for the month?
10) The sales of Morgan’s business for the month totaled $5,609.51, and she received a small business grant of $1,000. Her rent payment was $1,025, her maintenance bill was $897.21, her payroll expenses were $1,097.45, and her ingredients cost was $679.80. What was her net income for the month?
11) The sales of Jay’s business for the month totaled $23,786.12, and he received a rent payment from his business property of $2,500. His mortgage payment was $2,980.45, his utilities bill was $986.53, his payroll expenses were $10,119.45, and his ingredients cost was $4,579.45. What was his net income for the month?
12) The sales of Olivia’s business for the month totaled $14,576.97. Her rent payment was $2,045, she spent $450 on advertising, her utilities bill was $568.21, her payroll expenses were $2,459.07, and her ingredients cost was $980.65. What was her net income for the month?