What is the net profit for year end 31st december 2xxx
a.32,000
b.26,250
c.5,750
d.6,000

Option C. 5,750

Explanation:

Step 1: Determine the Total revenue

The total revenue can be determined using the formula below;

R=S+I

where;

R=total revenue

S=sales revenue

I=interest revenue

In or case;

R=unknown

S=30,000

I=2,000

replacing;

R=(30,000+2,000)=$32,000

Total revenue=$32,000

Step 2: Determine total expenses

The total expenses can be determined using the expression;

E=F+M+A+R+S+O

where;

E=total expenses

F=furniture and equipment expenses

M=maintenance and repair

A=advertising

R=rent

S=salaries and wages

O=others

In our case;

E=unknown

F=15,000

M=200

A=300

R=1,000

S=9,000

O=750

Replacing;

E=(15,000+200+300+1,000+9,000+750)=$26,250

Step 3: Determine the net profit

The net profit can be expressed as;

P=R-E

where;

P=net profit

R=total revenue

E=total expenses

In our case;

P=unknown

R=$32,000

E=$26,250

replacing;

P=32,000-26,250=$5,750

Net profit=$5,750

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