Question

ABC, Inc.'s income statement shows Service Revenue of $40,000, Wages Expense of $25,000 and Net Income of $1,000. The other expenses on ABC's income statement must equal ______.
A) $14,000.
B) $15,000.
C) S66,000.
D) $16,000.

Answer 1

Answer:

A) $14,000.

Explanation:

In the profit or loss statement, the key elements are sales and expenses and the net of these two gives the net income.

Given

Service Revenue = $40,000,

Wages Expense = $25,000

Net Income = $1,000

Total expense = $40,000 - $1,000 = $39,000

The total expense is made of the wage expense and other expenses.

Therefore, other expenses = $39,000 - $25,000

= $14,000