Gino is a computer programmer who earned $ 45,000 in 2019. But on January 1, 2020 he opened a landscaping business.At the end of 2020, Gino submitted the information listed below to his accountant.Use the question facts to calculate Gino's opportunity cost of production and economic profit.Gino stopped renting out his cottage for $ 3,500 a year and used it as his business premises.1.The market value of the cottage increased from$ 92,000 to$ 98,0002.3.He spent $ 30,000 on materials, phone, utilities, etc4.He leased machines for $ 15,000 a year.5.He paid $ 15,000 in wages.6.He used $ 5,000 from his savings account, which earns 5 percent a year interest.7.He borrowed $ 20,000 at 10 percent a year from the bank.8.He sold $ 240,000 worth of landscaping.9.Normal profit is $25,000a year.

Economic profit is the profit which is earned by the company when all the explicit as well as…

Gino is a computer programmer who earned $ 45,000 in 2019. But on January 1, 2020 he opened a landscaping business. At the end of 2020, Gino submitted the information listed below to his accountant. Use the question facts to calculate Gino's opportunity cost of production and economic profit 1. Gino stopped renting out his cottage for $ 3,500 a year and used it as his business premises. The market value of the cottage increased from$ 92,000 to$ 98,000 2. 3. He spent $ 30,000 on materials, phone, utilities, etc. 4. He leased machines for $ 15,000 a year. 5. He paid $ 15,000 in wages. 6. He used $ 5,000 from his savings account, which earns 5 percent a year interest. 7. He borrowed $ 20,000 at 10 percent a year from the bank 8. He sold $ 240,000 worth of landscaping. 9. Normal profit is $25,000a year.

Gino is a computer programmer who earned $ 45,000 in 2019. But on January 1, 2020 he opened a landscaping business. At the end of 2020, Gino submitted the information listed below to his accountant. Use the question facts to calculate Gino's opportunity cost of production and economic profit 1. Gino stopped renting out his cottage for $ 3,500 a year and used it as his business premises. The market value of the cottage increased from$ 92,000 to$ 98,000 2. 3. He spent $ 30,000 on materials, phone, utilities, etc. 4. He leased machines for $ 15,000 a year. 5. He paid $ 15,000 in wages. 6. He used $ 5,000 from his savings account, which earns 5 percent a year interest. 7. He borrowed $ 20,000 at 10 percent a year from the bank 8. He sold $ 240,000 worth of landscaping. 9. Normal profit is $25,000a year.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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