What is the amount of Lantz's income before income taxes?

A) $553,800.
B) $465,800.
C) $199,800.
D) $531,800.

Question

What is the amount of Lantz's income before income taxes?A) $553,800.B) $465,800.C) $199,800.D) $531,800.

Kiara Williams · Accepted Answer

Final Answer : C, Explanation :  To calculate Lantz's income before income taxes, we need to consider revenues, gains, and expenses. The calculation is as follows:Revenues:- Cash sales: $255,000- Credit sales: $479,000- Cash collections for services yet to be provided (not included as it represents unearned revenue, not recognized until the service is provided)- Interest income: $7,700Expenses and Losses:- Supplies expense: $336,000- Rent expense: $36,000- Wages expense: $49,000- Other operating expenses: $79,000- Interest expense: $19,900- Loss from the sale of property and equipment: $22,000Income before income taxes = (Cash sales + Credit sales + Interest income) - (Supplies expense + Rent expense + Wages expense + Other operating expenses + Interest expense + Loss from sale of property and equipment)= ($255,000 + $479,000 + $7,700) - ($336,000 + $36,000 + $49,000 + $79,000 + $19,900 + $22,000)= $741,700 - $541,900= $199,800

What is the amount of Lantz's income before income taxes?

A) $553,800.
B) $465,800.
C) $199,800.
D) $531,800.

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