Microtel began operations at the beginning of 20X6 with a $10,000 cash investment by stockholders. During 20X6, Microtel had revenue on account of $5,000; of this amount $2,000 was collected during 20X6 and $3,000 was an outstanding receivable at year-end. Microtel incurred $3,000 of operating expenses during 20X6; of this amount $1,000 was unpaid at year-end. During 20X6, $1,000 cash was disbursed as dividends. The only other transaction during 20X6 was the purchase of $5,000 of equipment for cash near the end of the year. How much was Microtel's 20X6 net income?

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Sh No 1 To know Microtels tatal liabilities at the year end We have to use follo... View the full answer