Question

The following transactions occurred for the Microchip Company.

A. On October 1, 2024, Microchip lent $93,000 to another company. A note was signed with principal and 10% interest to be paid on September 30, 2025.
B. On November 1 ,2024 , the company paid its landlord $10,200 representing rent for the months of November through January. Prepaid rent was debited at the time of payment.
C. On August 1, 2024, collected $16,200 in advance rent from another company that is renting a portion of Microchip's factory. The $16,200 represents one year's rent and the entire amount was credited to deferred rent revenue at the time cash was received.
D. Depreciation on office equipment is $5,900 for the year.Vacation pay for the year that had been earned by employees but not paid to them or recorded is 9,400.The company records vacation pay as salaries expense.
E. Microchip began the year with $3,400 in its asset account, supplies. Dusing the year, $7,900 in spuppies were purchased and debited to supplies. At year-end, spuppies costing $3,950 remail on hand.

Answer 1

The accounting profit of the firm is $50,000.

Step-by-step explanation:

The subject of this question is Business.

To answer the question, we need to determine the accounting profit of the firm based on its sales revenue and expenses. Accounting profit is calculated by subtracting total expenses from sales revenue.

Given:
Sales revenue = $1 million
Labor expenses = $600,000
Capital expenses = $150,000
Material expenses = $200,000

Accounting profit = Sales revenue - Total expenses
Accounting profit = $1,000,000 - ($600,000 + $150,000 + $200,000)
Accounting profit = $50,000