Question

Flip's Pizzeria Inc. has the following financial items for the current year: Advertising Expenses $95,000 Cost of Goods Sold $770,000 Other Operating Expenses $520,000 Sales $2,825,000 Wages and Salaries $300,000 Capital Gain $45,000 Calculate Flip's taxable income for the current year.

Answer 1

Solution: Calculation of Taxable Income of Flip's Pizzeria Inc.

Particulars	$	$
Income From Business
Sales	28,25,000
Less: Cost of goods sold	7,70,000
Less: Wages and salaries	3,00,000
Gross profit	17,55,000
Less: Advertising Expenses	95,000
Less: Other operating expenses	5,20,000
Net Profit	11,40,000	11,40,000
Capital Gains		45,000
Total Taxable Income		11,85,000

Therefore, the Total Taxable Income of Flip's Pizzeria Inc. is $11,85,000