The Bright Cleaning Company has annual revenue of $117,000. Their operating expenses include salary expense of $41,600, depreciation expense for equipment of $500, supplies expense of $936, automobile expense of $2,048, and miscellaneous expenses of $550. What is the net profit before federal income tax for the Bright Cleaning Company?

Question

Quizplus · Accepted Answer

Net profit before federal income tax is calculated by subtracting all operating expenses from annual revenue.
Net profit before federal income tax = Annual revenue - Salary expense - Depreciation expense - Supplies expense - Automobile expense - Miscellaneous expenses

Net profit before federal income tax = $117,000 - $41,600 - $500 - $936 - $2,048 - $550
Net profit before federal income tax = $71,366

Therefore, the best choice is B.

The Bright Cleaning Company Has Annual Revenue of $117,000