Question

Your accounts receivable clerk, Patricia Adams, to whom you pay a salary of 1,410 per month, has just purchased a new Acura. You decide to test the accuracy of the accounts receivable balance of85,050 as shown in the ledger. The following information is available for your first year in business:

(1) Collections from customers
(2) Merchandise purchased
(3) Ending merchandise inventory
(4) Goods are marked to sell at 40

What is the question?

Answer 1

The firm's accounting profit can be calculated as total revenues minus explicit costs. In this case, the accounting profit is $50,000.

Step-by-step explanation:

To calculate the firm's accounting profit, we need to subtract the explicit costs from the total revenues. In this case, the total revenues are $1 million, and the explicit costs are $600,000 for labor, $150,000 for capital, and $200,000 for materials.

So, the accounting profit can be calculated as follows: $1,000,000 - ($600,000 + $150,000 + $200,000) = $50,000.

Therefore, the firm's accounting profit is $50,000.