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Consider the following information: Rent Revenue: $5,000 Rent Receivable: $2,000 Interest Revenue: $2,000 Interest Receivable: $1,000 Rent Expense: $4,000 Insurance Expense: $1,200 Insurance Payable: $1,200 Salaries Expense: $3,000 Salaries Payable: $500 Which of the following states the amount of net profit or loss for this company?
Consider the following information:
Rent Revenue: $5,000
Rent Receivable: $2,000
Interest Revenue: $2,000
Interest Receivable: $1,000
Rent Expense: $4,000
Insurance Expense: $1,200
Insurance Payable: $1,200
Salaries Expense: $3,000
Salaries Payable: $500
Which of the following states the amount of net profit or loss for this company?
Expert Solution
Computation of Amount of Net Profit or Loss for the Company:
Net Profit (Loss) = Total Revenue - Total Expenses
Here,
Total Revenue = Rent + Interest = 5,000 + 2,000 = 7,000
Total Expense = Rent + Insurance + Salaries = 4,000 + 1,200 + 3,000 = 8,200
Net Profit (Loss) = 7,000 - 8,200 = 1,200 loss
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