Question
The following information relates to the activities of Ahmed photography for the year ended 31 Mar 2022: & multicolumn(1)(|c|)( boldsymbol(E) ) Gross profit & 20,000 Depreciation expense & 1,000 Rent expense & 4,000 Light and heat & 1,000 Telephone and postage & 2,000 Motor vehicle expense & 3,000 Equipment & 5,000 What is the entity's operating profit for the period? £ 9,000 £ 14,000 £ 4,000
Answer
4.6
(352 Votes)
Francesca
Professional · Tutor for 6 years
Answer
First, let's calculate the total operating expenses:###
4,000 +
2,000 +
13,000\)Now apply the values into the operating profit formula:### \(Operating profit =
13000 (Total Operating Expenses) = £ 7000\)
Explanation
## Step 1: Identify the expensesIn the table given, we have an array of expenses. Following are the expenses.Depreciation expense: 1000Rent expense: 4000Light and heat: 1000Motor vehicle expense: 2000Equipment: 5000## Step 2: Calculate the total operating expensesTo find the total operating expenses, we need to add all possible operating expenses available. ###
###
4,000 +
2,000 + $5,000 \)## Step 3: Calculate Operating profitOperating profit can be calculated by deducting total operating expenses from the Gross profit. ###