Calculation of net business income The following is the income statement for Michel Levert's sole proprietorship for
Question:
Calculation of net business income
The following is the income statement for Michel Levert's sole proprietorship for his fiscal year ended December 31, 2021:
Sales 500 000 $
Less: Cost of goods sold (189 200 )
Gross profit 310 800 $
Selling and administrative expenses : ?
Salaries and benefits (Note 1) 225 000 $
Rent 25 300 $
Book amortization of capital assets (Note 2) 6 800 $
Heating and electricity 3 700 $
Entertainment expenses (Note 3) 4 000 $. 264 800 )
Net income before taxes 46 000 $
Note 1 This amount includes an amount of $70,000 paid to Mr. Levert as a bonus. Other salaries are reasonable and paid to employees who are not related to Mr. Levert.
Note 2 The tax depreciation allowance for capital assets of the company is $8,300 for the year ended December 31, 2021.
Note 3 This item consists of meal and entertainment expenses with customers in the amount of $4,000.
What is the lowest possible net business income of Mr. Levert's business for his year ended December 31, 2021?
