QuestionMay 24, 2025

Lantz Company has provided the following information: - Cash sales totaled 255,000 - Credit sales totaled 479,000 - Cash collections from customers for services yet to be provided totaled 88,000 . A 22,000 loss from the sale of property and equipment occurred. - Interest income was 7,700 - Interest expense was 19,900 - Supplies expense was 336,000 - Rent expense for the store was 36,000 - Wages expense was 49,000 - Other operating expenses totaled 79,000 - Unearned revenue was 4,000 What is the amount of Lantz's income before income taxes?

Lantz Company has provided the following information: - Cash sales totaled 255,000 - Credit sales totaled 479,000 - Cash collections from customers for services yet to be provided totaled 88,000 . A 22,000 loss from the sale of property and equipment occurred. - Interest income was 7,700 - Interest expense was 19,900 - Supplies expense was 336,000 - Rent expense for the store was 36,000 - Wages expense was 49,000 - Other operating expenses totaled 79,000 - Unearned revenue was 4,000 What is the amount of Lantz's income before income taxes?
Lantz Company has provided the following information: - Cash sales totaled 255,000 - Credit sales totaled 479,000 - Cash collections from customers for services yet to be provided totaled 88,000 . A 22,000 loss from the sale of property and equipment occurred. - Interest income was 7,700 - Interest expense was 19,900 - Supplies expense was 336,000 - Rent expense for the store was 36,000 - Wages expense was 49,000 - Other operating expenses totaled 79,000 - Unearned revenue was 4,000 What is the amount of Lantz's income before income taxes?

Solution
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Answer

199,800 Explanation 1. Calculate Total Revenue Total revenue includes cash sales, credit sales, and interest income. Cash collections for services yet to be provided are not included as they are unearned. Total Revenue = 255,000 + 479,000 + 7,700 = 741,700 2. Calculate Total Expenses Total expenses include supplies expense, rent expense, wages expense, other operating expenses, interest expense, and loss from the sale of property and equipment. Total Expenses = 336,000 + 36,000 + 49,000 + 79,000 + 19,900 + 22,000 = 541,900 3. Calculate Income Before Income Taxes Subtract total expenses from total revenue. Income Before Income Taxes = 741,700 - 541,900 = 199,800

Explanation

1. Calculate Total Revenue<br /> Total revenue includes cash sales, credit sales, and interest income. Cash collections for services yet to be provided are not included as they are unearned.<br /> Total Revenue = $255,000 + 479,000 + 7,700 = 741,700$<br /><br />2. Calculate Total Expenses<br /> Total expenses include supplies expense, rent expense, wages expense, other operating expenses, interest expense, and loss from the sale of property and equipment.<br /> Total Expenses = $336,000 + 36,000 + 49,000 + 79,000 + 19,900 + 22,000 = 541,900$<br /><br />3. Calculate Income Before Income Taxes<br /> Subtract total expenses from total revenue.<br /> Income Before Income Taxes = $741,700 - 541,900 = 199,800$
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