22. A contractor receives $8,000 in June for the June work and also receives $3,000 for work done in May. The contractor pays $5,000 of the June expenses in June, and also pays $1,000 of May expenses. Disregarding any other income or costs, how much net income will the contractor recognize in June?
Answer: B
The contractor will recognize a net income of $3,000 in June.
In June, the contractor receives a total income of $8,000 for work completed in that month and an additional $3,000 for work done in May. After accounting for the expenses paid in June, the total recognized net income comes to $3,000.
A) $2,000
Option A is incorrect because it underestimates the net income calculated. The total income of $11,000 (which includes $8,000 for June and $3,000 for May) minus the expenses of $6,000 (which includes $5,000 for June and $1,000 for May) results in a net income of $5,000, not $2,000.
B) $3,000
Option B is correct. The contractor's total income is $11,000, and after deducting the total expenses of $8,000, the net income recognized for June is $3,000. This reflects the actual income generated from the work performed in June after accounting for the related expenses.
C) $4,000
Option C is incorrect as it miscalculates the net income. While it recognizes some income, it fails to accurately account for the total expenses deducted from the total income, leading to an erroneous net income figure of $4,000.
D) $5,000
Option D is also incorrect. Although it reflects a higher net income, it does not factor in all expenses correctly. The correct calculation should reflect total income minus total expenses, leading to a net income of $3,000, not $5,000.
Conclusion
The correct answer is definitively $3,000, as calculated by deducting the total expenses from the total income for the month. All other options fail to accurately reflect the net income due to miscalculations in either income or expenses. Thus, only Option B aligns with the correct financial assessment for June.