ABC Restaurant Pty Ltd started the year with total assets of $90 000 and total liabilities of $40 000.During the year the business earned $100 000 in income and incurred $55 000 in expenses.Dividends paid were $10 000.
The profit for ABC for the period was:
A)$35 000.
B)$45 000.
C)$20 000.
D)$90 000.

Question

Quizplus · Accepted Answer

To calculate the profit for the period, we start with the formula:
Profit = Income - Expenses
Therefore, based on the information provided:
Profit = $100 000 - $55 000
Profit = $45 000

Dividends paid do not affect the calculation of profit. Therefore, the correct answer is B) $45 000.

ABC Restaurant Pty Ltd Started the Year with Total Assets