Question

Candle in the Wind is a store for people who enjoy and collect candles to decorate their homes. Last year, its net sales totaled $125,000 with $13,700 in taxes. The cost value of the candles it sold was $42,300. The expenses that the operation has are salaries to the owner and one part-time assistant for $52,000, administrative expenses of $400, and utilities at $900. Calculate the net profit after tax for Candle in the Wind.

Answer 1

$15,700

Step-by-step explanation:

The computation of the net profit after taxes is shown below:

Sales revenue $125,000

Less: Cost of goods sold - -$42,300

Gross profit $82,700

Less: Operating expenses

One time part assistant $52,000

Administrative expenses $400

Utilities expenses $900

Total operating expenses -$53,300

Net Profit before tax $29,400

Less: income tax expense -$13,700

Net profit after tax $15,700