Question

Day Street Deli's owner is disturbed by the poor profit performance of his ice cream counter. He has prepare following profit analysis for the year just ended. $45,000 20,000 $25,000 Sales Less: Cost of food Gross profit Less: Operating expenses: Wages of counter personnel Paper products (e.g., napkins) Utilities (allocated) Depreciation of counter equipment and furnishings Depreciation of building (allocated) $ 12,000 4,000 2,900 2,500 4,000 3,000 Deli manager's salary (allocated) Total Loss on ice cream counter 28,400 $ (3,400) Required: Correct the owner's profit analysis for the year just ended. Less: Operating expenses Total

Answer 1

Sales		$       45,000
Less: Cost of food		$       20,000
Gross Profit		$       25,000
Less: Operating Expenses
Wages of counter personnel	$       12,000
Paper products	$         4,000
Depreciation of counter equipment and furnishings	$         2,500
Total		$       18,500
Profit on Ice Cream Center		$         6,500