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.
• Supplies expense was $336,000.
• Rent expense for the store was $36,000.
• Wages expense was $49,000.
• Other operating expenses totaled $79,000.
• Unearned revenue was $4,000.
-
What is the amount of Lantz's income before income taxes?

Question

Quizplus · Accepted Answer

To calculate Lantz's income before income taxes, we need to consider revenues, gains, and expenses. The calculation is as follows:Revenues:- Cash sales: $255,000- Credit sales: $479,000- Cash collections for services yet to be provided (not included as it represents unearned revenue, not recognized until the service is provided)- Interest income: $7,700Expenses and Losses:- Supplies expense: $336,000- Rent expense: $36,000- Wages expense: $49,000- Other operating expenses: $79,000- Interest expense: $19,900- Loss from the sale of property and equipment: $22,000Income before income taxes = (Cash sales + Credit sales + Interest income) - (Supplies expense + Rent expense + Wages expense + Other operating expenses + Interest expense + Loss from sale of property and equipment)= ($255,000 + $479,000 + $7,700) - ($336,000 + $36,000 + $49,000 + $79,000 + $19,900 + $22,000)= $741,700 - $541,900= $199,800

Lantz Company Has Provided the Following Information: • Cash Sales