Question

Check my w Flip's Pizzeria Inc. has the following financial items for the current year: Advertising Expenses $90,000 Cost of Goods Sold $650,000 Other Operating Expenses $315,000 Sales $2,530,000 Wages and Salaries $495,000 Capital Gain $20,000 Calculate Flip's taxable income for the current year. B C 1 Taxable income (Net Operating Loss)= 3 4 5 6 D E

Answer 1

Solution:

1)

Flip's taxable income for the current year:

Particulars	Amount	Amount
Sales		$2,530,000
Less: Cost of goods sold		$650,000
Gross margin		$1,880,000
Less: Operating expenses
Advertising expenses	$90,000
Other operating expenses	$315,000
Wages and salaries	$495,000
Total operating expenses		$900,000
Net income		$980,000

Taxable income
Net income	$980,000
Capital Gain	$20,000
Taxable income	$1,000,000

2)General taxable income for the current year

Particulars	Amount
Sales	$1,680,000
Less: Cost of Goods sold	$635,000
Wages and salaries	$500,000
Other operating expenses	$470,000
Advertising expenses	$55,000
General's taxable income for the current year	$20,000