Asked by Annie Kay Cumberland Elliott on May 28, 2024
Verified
Based on the information for Scott Industries, is it profitable? Explain your answer.
Accounting Equation
The foundational principle in accounting that states assets equal liabilities plus shareholders' equity.
Profitable
Refers to a financial state where income exceeds expenses, resulting in a positive gain.
- Assess the profitability of a company through the analysis of income, expenses, and net income.
Verified Answer
DS
Doncarlus ScottMay 30, 2024
Final Answer :
($165,000 Fees Earned + $3,000 Interest Income) −
($40,000 Salaries and Wages Expense + $44,000 Selling Expenses + $18,000 Income Taxes Expense + $20,000 Rent Expense) = $46,000 Net IncomeScott Industries had net income for the period of $46,000. Since revenues exceeded expenses for the period, the company would be considered profitable.
($40,000 Salaries and Wages Expense + $44,000 Selling Expenses + $18,000 Income Taxes Expense + $20,000 Rent Expense) = $46,000 Net IncomeScott Industries had net income for the period of $46,000. Since revenues exceeded expenses for the period, the company would be considered profitable.
Learning Objectives
- Assess the profitability of a company through the analysis of income, expenses, and net income.
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