Question

Lant Company has provided the following information:

• Cash sales totaled $290,000.
• Credit sales totaled $489,000.
• Cash collections from customers for services yet to be provided totaled $89,000.
• A $25,000 loss from the sale of property and equipment occurred.
• Interest income was $8,700.
• Interest expense was $18,900.
• Supplies expense was $390,000.
• Rent expense for the store was $39,000.
• Wages expense was $49,000.
• Other operating expenses totaled $79,000.
• Unearned revenue was $3,900.

What is the amount of Lant’s income before income taxes?

Multiple Choice

• $275,800

• $186,800

• $389,000

• $197,000

Answer 1

Answer: $186,800

Calculations:

Income Statement
Revenues:
Sales revenue [$290,000 + $489,000]	$ 779,000
Interest income	$ 8,700
Total revenues		$ 787,700
Expenses:
Interest expense	$ 18,900
Supplies expens	$ 390,000
Rent expense	$ 39,000
Wages expense	$ 49,000
Other Operating expenses	$ 79,000
Loss form the sale of property and equipment	$ 25,000
Total expenses		$ 600,900
Net income		$ 186,800