(Scenario: Accounting and Economic Profit)Use Scenario: Accounting and Economic Profit

question 180

Multiple Choice

(Scenario: Accounting and Economic Profit) Use Scenario: Accounting and Economic Profit.The accounting profit of Wang's Wicker Furniture Store is: Scenario: Accounting and Economic Profit
Rather than put the $100,000 that his grandmother left him in a mutual fund that earns 5% each year,Tommy Wang quit his job,which paid $60,000 per year,and started Wang's Wicker Furniture Store.He rented a showroom for $20,000 for the year,purchased $60,000 in wicker furniture,and incurred costs of $40,000 for sales help and advertising.In his first year,his revenue was $150,000.

• A)$200,000.
• B)$60,000.
• C)$30,000.
• D)$0.

Calculate the impact of additional expenses like property improvements on tax bills.

Analyze the effect of tax-exempt income on gross income calculation.

Evaluate the tax benefits of exempt statuses on property assessments.

Understand the differences in tax liabilities under different filing statuses.

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Definitions:

Net Income

The total profit of a business after all expenses and taxes have been deducted from total revenue.

Internal Growth Rate

The maximum rate at which a company can expand using only its own sources of funding without resorting to external financial options.

Constant Percentage

A fixed percentage rate applied to various mathematical and financial calculations.

Retains Earnings

Retains Earnings are the portion of net income that is not distributed to shareholders as dividends, but rather retained by the company for reinvestment or to pay off debt.