Lantz Company has provided the following information: Cash sales totaled $255,000.
Credit sales totaled $479,000.
Cash collections from customers for services yet to be provided totaled $88,000.
A $22,000 loss from the sale of property and equipment occurred.
Interest income was $7,700.
Interest expense was $19,900.
Cost of goods sold was $336,000.
Rent expense was $36,000.
Salaries expense was $49,000.
Other operating expenses totaled $79,000.
Unearned revenue was $4,000.
How much was Lantz's income before income taxes?
A) $553,800.
B) $465,800.
C)$199,800.
D)$531,800.

Question

Quizplus · Accepted Answer

Lantz's income before income taxes is calculated as follows: Total sales (cash + credit) = $255,000 + $479,000 = $734,000. Subtract cost of goods sold ($336,000) and operating expenses (rent $36,000 + salaries $49,000 + other $79,000) = $164,000. Subtract interest expense ($19,900) and add interest income ($7,700). Subtract the loss from the sale of property and equipment ($22,000). The calculation is: $734,000 - $336,000 - $164,000 - $19,900 + $7,700 - $22,000 = $199,800.

Lantz Company Has Provided the Following Information: Cash Sales Totaled