The parlor's gross revenue for the month is P 100,000 and expenses incurred are 30%. Maria also earned a broker's fee of P 20,000 for selling a real property. The amount of net income that should be reported by the parlor isSelect one:a.P 84,000b.P 70,000c.P 50,000d.P 90,000
Question
The parlor's gross revenue for the month is P 100,000 and expenses incurred are 30%. Maria also earned a broker's fee of P 20,000 for selling a real property. The amount of net income that should be reported by the parlor isSelect one:a.P 84,000b.P 70,000c.P 50,000d.P 90,000
Solution
To calculate the net income, we first need to determine the total expenses.
Step 1: Calculate the expenses The expenses are 30% of the gross revenue, so we multiply P 100,000 by 30% (or 0.30). 100,000 * 0.30 = P 30,000
Step 2: Subtract the expenses from the gross revenue Next, we subtract the expenses from the gross revenue to get the net income from the parlor. 100,000 - 30,000 = P 70,000
The broker's fee Maria earned for selling a real property is not included in the parlor's net income because it's not part of the parlor's operations.
So, the amount of net income that should be reported by the parlor is P 70,000.
Therefore, the correct answer is b. P 70,000.
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