Given this information, calculate the net profit for the business.

Sales revenue 103,401
Unearned revenue 3,170
Dividends 2,949
Cost of sales 31,647
Interest revenue 1,654
Operating expenses 18,994
Income tax expense 1,896

Question

Given this information, calculate the net profit for the business.

Sales revenue	103,401
Unearned revenue	3,170
Dividends	2,949
Cost of sales	31,647
Interest revenue	1,654
Operating expenses	18,994
Income tax expense	1,896

BlackTom AI · Accepted Answer

To determine net profit, we start by identifying which items are considered revenues and which are expenses under accrual accounting.
Revenues: include sales revenue and any other income earned during the period. Here, Sales revenue is 103,401 and Interest revenue is 1,654, giving total revenues of 105,055.
Unearned revenue is a liability representing cash received for goods or services not yet delivered; it is not recognized as revenue in the period, so it should not be added to revenues.
Expenses: include costs and charges the business incurs. The relevant expenses listed are Cost of sales 31,647, Operating expenses 18,994, and Income tax expense 1,896. Summing these gives total expenses of 52,537.
Dividends are distributions to owners, not operating expenses or costs of generating revenue, so they are not included in net profit calculations.
Net profit (net income) is calculated as total revenues minus total expenses: 105,055 − 52,537 = 52,518.
This aligns with the provided result, and the treatment of unearned revenue and dividends, as described, helps avoid double-counting or misclassifying items that belong outside the income statement for the period.

Given this information, calculate the net profit for the business. Sales revenue 103,401 Unearned revenue 3,170 Dividends 2,949 Cost of sales 31,647 Interest revenue 1,654 Operating expenses 18,994 Income tax expense 1,896

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