Lindsey Corporation had the following account balances:

- Refer to Exhibit 7-2.Given the information above,and assuming that Lindsey's total operating expenses (exclusive of cost of goods sold)are $40,000,pretax income is

Question

Lindsey Corporation had the following account balances:

- Refer to Exhibit 7-2.Given the information above,and assuming that Lindsey's total operating expenses (exclusive of cost of goods sold)are $40,000,pretax income is

Quizplus · Accepted Answer

To calculate the pretax income, we need to subtract the cost of goods sold and total operating expenses from gross profit.

Gross profit = $200,000 - $120,000 = $80,000

Pretax income = gross profit - operating expenses(exclusive of cost of goods sold)

Pretax income = $80,000 - $40,000 = $40,000

Therefore, the answer is D) $74,000

Lindsey Corporation Had the Following Account Balances