Exercise 4-6 completing the income statement columns and preparing closing entries lo p1, p2 these partially completed income statement columns from a 10-column work sheet are for brown's bike rental company. account title debit credit rent earned 120,000 salaries expense 46,300 insurance expense 7,400 office supplies expense 16,000 bike repair expense 4,200 depreciation expense—bikes 20,500 (1) use the information to determine the amount that should be entered on the net income line of the work sheet.

The amount of net income is $25,600

Explanation:

In the income statement, the total revenues and the total expenses are recorded.  

If the total revenues are more than the total expenditure then the company earns net income

And, If the total revenues are less than the total expenditure then the company have a net loss

The computation of the net income is shown below:

= Rent earned - Salaries expense - Insurance expense -  Office supplies expense - Bike repair expense  - Depreciation expense—Bikes

= $120,000 - $46,300 - $7,400 - $16,000 - $4,200 - $20,500

= $25,600

of the three mortgage options that demarco and tanya have to choose from, the balloon payment mortgage would be their best option, over adjustable payment and fixed payment plans.ultimately, the balloon payment plan would save demarco and tanya overall, in interest, would cost less monthly, and they would only have to make these payments for 8 years, opposing to 30 years for adjustable or fixed payment plans. 

overall, demarco and tanya would save $80,811 if they chose balloon payments over fixed payments, and would save $116,711 if they choose balloon payments over adjustable payments. benefits with choosing fixed payments over adjustable payments is that, in the end, the payments will still be $836.30 a month, while with adjustable payments, the initial monthly payments will be $763.38 to $1082.70 a month, ultimately leading to a more costly purchase. benefits with choosing fixed payments over balloon payments are not present. benefits in choosing adjustable payments over is that it has a lower interest rate, and starts with lower monthly payments initially. benefits in choosing adjustable payments over balloon payments include a lower interest rate, and lower initial monthly payments. benefits in choosing balloon payments over fixed payments include lower interest rates, lower overall price, lower monthly payments, takes less time to pay off, and does not require a downpayment. benefits in choosing balloon payments over adjustable payments include, lower monthly payments (when averaged), takes less time to pay off, and lower overall price.

hence, option c, balloon payments, is the best option for demarco and tanya to make this purchase, for it will save them a minimum of $80811, and a maximum of $116,711.