Account titlesTrialBal.Ajust.Ajust.Trial Bal.IncomesheetBal.Sheetdr.cr.dr.cr.dr.cr.dr.cr.dr.cr.cash 45,000 45,000 45,000 A/R 13,600 13,600 13,600 supplier on hand 2,000 1 1,400 600 600 prepaid insurance 1,800 2900 900 900 building 70,000 70,000 70,000 accumulated depreciation-building 12,500 3a1,250 13,750 13,750 plumbing tools & equipment 18,000 18,000 18,000 accumulated depreciation- plumbing tools & equip. 4,500 3b900 5,400 5,400 A/P 11,000 11,000 11,000 BW Reece capital 52,100 52,100 52,100 BW Reece drawing 20,000 20,000 20,000 pumb. Service revenue 140,000 140,000 140,000 Saleries expense 48,000 48,000 48,000 Utilities expense 1,700 1,700 1,700 220,100.00 220,100.00 1. Supplies expense1 1,400 1,400 1,400 2. Insurance expense2900 900 900 3a. Depreciation Expense Building3a1,250 1,250 1,250 3b. Depreciation Expense Equipment3b900 900 900 NET INCOME 85,850 85,850 4,450 4,450 222,250 222,250 140,000 140,000 168,100 168,100

Look at your Income Sheet (columns J and K). The net income is derived from deducting the expenses (Column J) from the total revenue (140,000; Column K).

In other words, Net Income is just Revenue minus Expenses.

Note that by adding the Net Income amount to Col J, it makes Cols J and K have the same final total; i.e. they "balance".