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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

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

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

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FrancescaProfessional · Tutor for 6 years

Answer

First, let's calculate the total operating expenses:<br /><br />### \(total operating expenses = $1,000 + $4,000 + $1,000 + $2,000 + $5,000 = $13,000\)<br /><br />Now apply the values into the operating profit formula:<br /><br />### \(Operating profit = $20000 (Gross Profit) - $13000 (Total Operating Expenses) = £ 7000\)

Explain

## Step 1: Identify the expenses<br />In the table given, we have an array of expenses. Following are the expenses.<br />Depreciation expense: 1000<br />Rent expense: 4000<br />Light and heat: 1000<br />Motor vehicle expense: 2000<br />Equipment: 5000<br /><br />## Step 2: Calculate the total operating expenses<br />To find the total operating expenses, we need to add all possible operating expenses available. <br />### \(total operating expenses = depreciation expense + rent expense + light and heat expense + motor vehicle expense + Equipment\)<br />### \(total operating expenses = $1,000 + $4,000 + $1,000 + $2,000 + $5,000 \)<br /><br />## Step 3: Calculate Operating profit<br />Operating profit can be calculated by deducting total operating expenses from the Gross profit. <br />### \(Operating profit = Gross profit - Total Operating Expense\)
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