We appreciate your visit to During the year a shop had revenues of Rs 125000 rent expenses Rs 12000 salaries Rs 25000 short term investments Rs 35000 and other expenses. This page offers clear insights and highlights the essential aspects of the topic. Our goal is to provide a helpful and engaging learning experience. Explore the content and find the answers you need!
Answer :
To find the net income of the shop, we need to subtract the total expenses from the total revenues. Here's how you can calculate it step by step:
Revenue: The total amount of money the shop earned during the year is Rs. 125,000.
Expenses: The shop had several expenses:
- Rent expenses: Rs. 12,000
- Salaries: Rs. 25,000
- Other expenses: Rs. 40,000
We do not include short-term investments as expenses in calculating net income because they are typically considered an asset rather than a direct expense.
Calculate Total Expenses: Add up all these expenses:
[tex]Total\ Expenses = 12,000 + 25,000 + 40,000 = 77,000\ Rs[/tex]
Calculate Net Income: Subtract the total expenses from the total revenue:
[tex]Net\ Income = Total\ Revenue - Total\ Expenses = 125,000 - 77,000 = 48,000\ Rs[/tex]
Therefore, the net income for the shop is Rs. 48,000.
Based on the options provided, the correct answer is Rs. 48,000.
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