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& multicolumn(1)(|c|)( E ) Gross profit & 16,000 Motor vehicle expense & 1,000 Rent expense & 3,000 Salaries & 4,000 Insurance & 2,000 Interest expense & 1,000 Fixtures and & 4,000 Fittings & What is the entity's Net Profit for the period? E9,000 E2,000 E12,000 E5,000 E6,000 E1,000

Question

& multicolumn(1)(|c|)( E ) 
 Gross profit & 16,000 
 
Motor vehicle 
expense
 & 1,000 
 Rent expense & 3,000 
 Salaries & 4,000 
 Insurance & 2,000 
 Interest expense & 1,000 
 Fixtures and & 4,000 
 Fittings & 


What is the entity's Net Profit for the period?
E9,000
E2,000
E12,000
E5,000
E6,000
E1,000

& multicolumn(1)(|c|)( E ) Gross profit & 16,000 Motor vehicle expense & 1,000 Rent expense & 3,000 Salaries & 4,000 Insurance & 2,000 Interest expense & 1,000 Fixtures and & 4,000 Fittings & What is the entity's Net Profit for the period? E9,000 E2,000 E12,000 E5,000 E6,000 E1,000

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PrudenceExpert · Tutor for 3 years

Answer

The Entity's Net Profit for this period is £1,000.

Explain

## Step 1<br />In order to find net profit, all the expenses presented in the table needs to be summed up, then this sum is subtracted from gross profit which is also given in the table.<br /><br />## Step 2 <br />Add up all the expenses which includes: <br />Motor vehicle expense, Rent expense, Salaries, Insurance, Interest expense, and the cost of fixtures and fittings given as \(£1,000, £3,000, £4,000, £2,000, £1,000 \) and \( £4,000 \) respectively. <br /><br />### \(\boldsymbol{Total \ Expenses = Motor's \ Vehicle \ Expense + Rent \ Expense + Salaries + Insurance + Interest \ Expense + Fixture \ and \ fittings} \)<br /><br />## Step 3<br />After finding the total expense, it's to subtract total expense from gross profit to result in the Entity's Net Profit. <br /><br />### \(\boldsymbol{Net \ Profit = Gross \ Profit - Total \ Expenses}\)<br /><br /># Calculation <br /><br />## Step 1<br />Find the sum of all the given expenses:<br /><br />### \(\boldsymbol{Total \ Expenses = 1,000 + 3,000 + 4,000 + 2,000 + 1,000 + 4,000 = 15,000}\)<br /><br />## Step 2<br />Subtract the total expense from Gross Profit to get the Net Profit:<br /><br />### \(\boldsymbol{Net \ Profit = 16,000 - 15,000 = 1,000}\)
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