57 questions. Try each one, then open the answer to check yourself and read the explanation.
Investors in a business are mainly interested in the firm's
Answer: D (profitability.)
Investors want a return, so they look mainly at profitability.
One of the characteristics of useful accounting information is
Answer: B (comparability.)
Comparability is a qualitative characteristic of useful information.
Which of the following items is found on the debit side of a trial balance?
Answer: B (Discount allowed)
Discount allowed is an expense with a debit balance; the other three have credit balances.
Which of the following transactions is a revenue expenditure?
Answer: D (Purchase of fuel for vehicle)
Fuel is a running cost used up in the period.
Credit notes received are source documents for
Answer: B (Return Outwards Journal.)
A credit note received comes from a supplier for goods we returned, so it is entered in the returns outwards journal.
A document forwarded to a supplier showing amount due for unsatisfactory goods is
Answer: A (Debit Note.)
The buyer sends a debit note to the supplier claiming the allowance for the faulty goods.
The claim of a proprietor of a business entity on its assets is
Answer: B (capital.)
The owner's claim on the assets is capital.
The apportionment of cost of a fixed asset to the profit and loss account is termed as
Answer: B (depreciation.)
Spreading a fixed asset's cost over its life is depreciation.
Entries in the purchases journal are transferred to the
Answer: B (payable ledger.)
Credit purchases are posted to suppliers' accounts in the payable (purchases) ledger.
A reduction in price to encourage prompt payment is
Answer: C (cash discount.)
Cash discount rewards quick payment.
Use the following information to answer questions 11 and 12.
Tei Ltd offered 1,560 units of a magazine at ₦60.00 each. Trade discount is 10% and cash discount is 10% within 30 days and 5% within 60 days.
The amount payable if payment is made on the 40th day is
Answer: C (₦80,028.)
1,560 × 60 = 93,600 less 10% trade = 84,240; within 60 days 5% cash discount: 84,240 × 0.95 = ₦80,028.
Use the following information to answer questions 11 and 12.
Tei Ltd offered 1,560 units of a magazine at ₦60.00 each. Trade discount is 10% and cash discount is 10% within 30 days and 5% within 60 days.
The cash discount allowed on the 50th day is
Answer: D (₦4,212.)
5% × 84,240 = ₦4,212.
An amount of Le 2000 received from a customer, Kofi has been credited to another customer, Kofigo's account. This is an error of
Answer: B (commission.)
Posting to the wrong account of the same class (another customer) is an error of commission.
Current assets less current liabilities is
Answer: A (working capital.)
That is the definition of working capital.
A debit balance of GH¢420 on the Purchases Ledger Control Account means that as at that date
Answer: A (trade creditors have been overpaid by GH¢420.)
A debit balance on a creditors' account means suppliers were overpaid.
Sales and Purchases ledgers are used in a business to keep records of
Answer: B (accounts of individual customers and suppliers.)
They hold the personal accounts of customers and suppliers.
Which of the following activities will increase profits?
Answer: B (Reduction in provision for doubtful debts)
A reduction in the provision is credited to profit and loss.
The concept that implies that a business will operate for an indefinitely long period of time is
Answer: B (going concern concept.)
Going concern assumes the business continues.
The consistency concept aims at
Answer: C (comparability of accounting records.)
Using the same methods each year makes records comparable.
The concept which states that revenue is recognized when goods are sold is
Answer: A (Realisation concept.)
Revenue is realised at the point of sale.
Cost of goods sold is calculated as
Answer: A (opening stock + purchases-closing stock.)
Cost of goods sold = opening stock + purchases − closing stock.
The wages of an office cleaner is classified as
Answer: D (administrative overhead.)
An office cleaner works in administration, not the factory, so the wage is an administrative overhead.
Use the following information to answer questions 23 and 24.
Sales: Le 120,000
Purchases: Le 100,000
Opening stock: Le 10,000
Closing stock: Le 20,000
The cost of goods sold is
Answer: C (Le 90,000.)
10,000 + 100,000 − 20,000 = Le 90,000.
Use the following information to answer questions 23 and 24.
Sales: Le 120,000
Purchases: Le 100,000
Opening stock: Le 10,000
Closing stock: Le 20,000
The gross profit or loss is
Answer: A (Le 30,000 gross profit.)
120,000 − 90,000 = Le 30,000 gross profit.
The amount set aside out of profits to strengthen the financial position of the business is
Answer: B (reserve.)
Profit retained for strengthening the business is a reserve.
A fall in value of a fixed asset due to technological changes is described as
Answer: C (obsolescence.)
Assets becoming out of date through new technology is obsolescence.
A credit entry is made in the Plant and Machinery Account for the
Answer: B (sale of plant and machinery.)
A sale removes the asset, so the asset account is credited.
In a manufacturing account, royalties paid is
Answer: D (debited to the manufacturing account.)
Royalties are a direct expense, debited in the manufacturing account (prime cost).
One of the component of factory overheads is
Answer: D (depreciation of plant and machinery.)
Depreciation of factory plant is an indirect factory cost.
Use the following information to answer questions 30 and 31.
Direct materials used: GH¢64,000
Direct labour: GH¢30,000
Production overheads: GH¢22,000
Work in progress at beginning: GH¢9,000
Work in progress at close: GH¢14,000
Total cost of production is
Answer: C (GH¢111,000.)
64,000 + 30,000 + 22,000 + 9,000 − 14,000 = GH¢111,000.
Use the following information to answer questions 30 and 31.
Direct materials used: GH¢64,000
Direct labour: GH¢30,000
Production overheads: GH¢22,000
Work in progress at beginning: GH¢9,000
Work in progress at close: GH¢14,000
Prime cost of production is
Answer: B (GH¢94,000.)
Direct materials 64,000 + direct labour 30,000 = GH¢94,000.
Use the following information to answer questions 33 and 34. (01/01/2016 / 31/12/2016)
Trade debtors: D 80,000 / D 100,000
Trade creditors: D 30,000 / D 40,000
Stock: D 70,000 / D 90,000
Cheques received from trade debtors in 2016: D 350,000
Payments made to trade creditors in 2016: D 220,000
Credit sales for 2016 is
Answer: B (D 370,000.)
350,000 + 100,000 − 80,000 = D 370,000.
Use the following information to answer questions 33 and 34. (01/01/2016 / 31/12/2016)
Trade debtors: D 80,000 / D 100,000
Trade creditors: D 30,000 / D 40,000
Stock: D 70,000 / D 90,000
Cheques received from trade debtors in 2016: D 350,000
Payments made to trade creditors in 2016: D 220,000
Credit purchases for 2016 is
Answer: B (D 230,000.)
220,000 + 40,000 − 30,000 = D 230,000.
The excess of assets over liabilities of a not-for-profit making organization is
Answer: D (accumulated fund.)
A club's assets less liabilities is its accumulated fund.
Use the following information to answer questions 36 and 37.
Receipt and Payments: 31st December, 2016 (₦)
Receipts: Cash at bank 460; Subscriptions 520; Donations 500; Sale of tickets 490; Entrance fees 670
Payments: New equipment 200; Cleaners' wages 540; Stationery 140; Repairs 110
The surplus for the year is
Answer: D (₦1,390.)
Income 520 + 500 + 490 + 670 = 2,180; expenses 540 + 140 + 110 = 790 (equipment is capital); surplus ₦1,390.
Use the following information to answer questions 36 and 37.
Receipt and Payments: 31st December, 2016 (₦)
Receipts: Cash at bank 460; Subscriptions 520; Donations 500; Sale of tickets 490; Entrance fees 670
Payments: New equipment 200; Cleaners' wages 540; Stationery 140; Repairs 110
The total income received for the year is
Answer: B (₦2,180.)
Subscriptions, donations, tickets and entrance fees: 520 + 500 + 490 + 670 = ₦2,180; the opening bank balance is not income.
The parties who are paid last in the event of winding-up are
Answer: C (ordinary shareholders.)
Ordinary shareholders rank last.
An event that will not require a change in the profit-sharing ratio of partners in a firm is when
Answer: D (partners assets value appreciates.)
A rise in asset values is handled by revaluation; it does not change the partners.
Use the following information to answer questions 40 and 41.
Net profit: ₦17,460
Capital Account: Taiwo ₦50,000; Obi ₦40,000
Drawings Account: Taiwo ₦12,000; Obi ₦10,000
Salary - Obi: ₦1,500
Interest on capital: 5%
Interest on drawings: 4%
Profit sharing ratio is 3:2 for Taiwo and Obi respectively.
Taiwo's share of profit is
Answer: B (₦7,404.)
Residual = 17,460 + interest on drawings 880 − interest on capital 4,500 − salary 1,500 = 12,340; Taiwo 3/5 = ₦7,404.
Use the following information to answer questions 40 and 41.
Net profit: ₦17,460
Capital Account: Taiwo ₦50,000; Obi ₦40,000
Drawings Account: Taiwo ₦12,000; Obi ₦10,000
Salary - Obi: ₦1,500
Interest on capital: 5%
Interest on drawings: 4%
Profit sharing ratio is 3:2 for Taiwo and Obi respectively.
Obi's share of profit is
Answer: C (₦4,936.)
2/5 × 12,340 = ₦4,936.
The accounting entries for cash realized from the sale of assets on dissolution of partnership is debit
Answer: C (Cash Account; credit Realisation Account.)
Cash comes in (debit cash) and the realisation account is credited with the proceeds.
The process of distributing shares to successful applicants is
Answer: C (allotment.)
Shares are allotted to successful applicants.
Interim dividend paid in the year is
Answer: B (debited to the Income Surplus Account.)
Dividends are appropriations, debited to the income surplus (appropriation) account.
The basis of apportionment of insurance on building in departmental accounts is
Answer: A (floor space occupied by the department.)
Building costs are shared by floor area.
Under the cost method in Branch Accounts, branch gross profit is disclosed in the
Answer: C (Branch Stock Account.)
With goods sent at cost, the branch stock account works as a trading account showing gross profit.
Use the following information to answer questions 47 and 48.
Ordinary share capital: Le 70,000
Retained earnings: Le 31,142
Motor vehicle at cost: Le 21,136
Accumulated depreciation-motor vehicle: Le 7,109
Furniture and fittings at cost: Le 1,334
Accumulated depreciation-Furniture of fittings: Le 1,007
Stock: Le 32,200
Debtors: Le 49,380
Bank: Le 15,953
Creditors: Le 11,329
Equity holders fund is
Answer: C (Le 101,142.)
70,000 + 31,142 = Le 101,142.
Use the following information to answer questions 47 and 48.
Ordinary share capital: Le 70,000
Retained earnings: Le 31,142
Motor vehicle at cost: Le 21,136
Accumulated depreciation-motor vehicle: Le 7,109
Furniture and fittings at cost: Le 1,334
Accumulated depreciation-Furniture of fittings: Le 1,007
Stock: Le 32,200
Debtors: Le 49,380
Bank: Le 15,953
Creditors: Le 11,329
Net book value of fixed assets is
Answer: C (Le 14,354.)
(21,136 − 7,109) + (1,334 − 1,007) = 14,027 + 327 = Le 14,354.
The authority to incur expenditure in the public sector is
Answer: A (warrant)
A warrant authorises spending.
(a) Mention three disadvantages to a business that does not keep proper accounting records.
(b) Explain the following characteristics of accounting information: (i) Relevance; (ii) Comparability; (iii) Consistency; (iv) Reliability.
(c) State two limitations in the use of accounting information for business decision making.
(a) Any three: true profit or loss cannot be found; financial position unknown; errors and fraud go undetected; difficult to get loans/credit; problems with tax assessment; poor planning and decisions; loss of records.
(b)(i) Relevance: information is useful for the purpose and can influence users' decisions.
(ii) Comparability: information can be compared with other periods and other firms.
(iii) Consistency: the same methods and policies are used from period to period.
(iv) Reliability: information is free from error and bias, verifiable and faithfully represents events.
(c) Any two: based on historical cost; ignores non-monetary factors; depends on estimates and judgement; may contain errors or be window-dressed; different accounting policies hinder comparison; inflation distorts figures.
Three problems, four one-line definitions, two limitations.
(a) Explain with examples, the following components of cost in a Manufacturing Account: (i) Direct material cost; (ii) Direct labour cost; (iii) Factory overhead.
(b) Describe the three types of stocks in a manufacturing concern.
(a)(i) Direct material cost: cost of raw materials that become part of and can be traced to the product, e.g. wood for furniture, leather for shoes, fabric for dresses.
(ii) Direct labour cost: wages of workers who work directly on the product, e.g. machine operators, carpenters on the job.
(iii) Factory overhead: indirect production costs that cannot be traced to a unit, e.g. factory rent, factory power and lighting, depreciation of plant, supervisors' salaries, lubricants.
(b) Raw materials – materials bought but not yet put into production; work-in-progress – partly finished goods; finished goods – completed goods ready for sale.
Define each cost with a concrete example, then the three stocks.
(a) Which business organisations have the need to prepare departmental accounts?
(b) State two reasons for preparing departmental accounts.
(c) State how the following incomes and expenses are apportioned in departmental accounts: (i) discount allowed; (ii) discount received; (iii) rent and rates; (iv) staff related costs; (v) depreciation; (vi) canteen expenses; (vii) electricity; (viii) advertising; (ix) bad debts.
(a) Businesses with several sections dealing in different goods or services under one roof, e.g. supermarkets and department stores, hotels (rooms, restaurant, bar), firms of accountants (audit, tax, consultancy), insurance companies (life, motor, marine).
(b) Any two: to find each department's profit; to compare departments; to decide which to expand or close; to control costs; to reward departmental managers.
(c) (i) Discount allowed – sales of each department. (ii) Discount received – purchases of each department. (iii) Rent and rates – floor area occupied. (iv) Staff related costs – number of staff (or wages) in each department. (v) Depreciation – value (cost/book value) of assets used by each department. (vi) Canteen expenses – number of employees. (vii) Electricity – floor area (or metered usage/number of points). (viii) Advertising – sales. (ix) Bad debts – credit sales of each department.
Give examples of departmental businesses, two reasons, then one basis per item.
(a) List six users of accounting information.
(b) State the formula and the use of each of the following accounting ratios: (i) Quick ratio; (ii) Net profit margin; (iii) Total assets turnover; (iv) Creditors payment period (in days).
(a) Any six: owners/shareholders; management; employees and trade unions; banks and lenders; suppliers/creditors; customers; government and tax authorities; potential investors; financial analysts; auditors; the general public.
(b)(i) Quick ratio = (current assets − stock) ÷ current liabilities; shows ability to pay short-term debts without selling stock.
(ii) Net profit margin = net profit ÷ sales × 100; shows profit earned on each unit of sales.
(iii) Total assets turnover = sales ÷ total assets; shows how efficiently assets are used to generate sales.
(iv) Creditors payment period = trade creditors ÷ credit purchases × 365 days; shows the average number of days taken to pay suppliers.
Six users, then formula plus purpose for each ratio.
Baako Ltd purchased motor vehicle as follows: (Date — Quantity — GH¢)
01/01/13 — 1 — 800,000
01/07/13 — 1 — 400,000
01/04/15 — 1 — 600,000
The company adopts a straight line method of depreciation at the rate of 10% per annum from the date of purchase. A separate account is prepared for provision for depreciation. On 30th June, 2014, the motor vehicle which was purchased on 1st July, 2013 was sold for GH¢240,000.
You are required to prepare: (a) Motor Vehicle Account for the year, 2013, 2014 and 2015. (b) Provision for Depreciation on Motor Vehicle Account for the year 2013, 2014, and 2015. (c) Motor Vehicle Disposal Account.
Depreciation (10% of cost, time-apportioned): 2013 – 80,000 + 20,000 (6 months on 400,000) = 100,000; 2014 – 80,000 + 20,000 (6 months to sale) = 100,000; 2015 – 80,000 + 45,000 (9 months on 600,000) = 125,000.
(a) Motor Vehicle Account (GH¢): 2013 Dr bank 800,000; bank 400,000; c/d 1,200,000. 2014 b/d 1,200,000; Cr disposal 400,000; c/d 800,000. 2015 b/d 800,000; Dr bank 600,000; c/d 1,400,000.
(b) Provision for Depreciation Account: 2013 Cr P&L 100,000, c/d 100,000. 2014 b/d 100,000; Cr P&L 100,000; Dr disposal 40,000; c/d 160,000. 2015 b/d 160,000; Cr P&L 125,000; c/d 285,000.
(c) Motor Vehicle Disposal Account (30/6/2014): Dr motor vehicle 400,000 | Cr provision for depreciation (one year) 40,000; bank 240,000; profit and loss – loss on disposal 120,000.
Charge depreciation only for the months each vehicle is owned.
On 31st December, 2016, the bank column of the cash book of Aminata Enterprise showed a debit balance of D 48,500. However, the bank statement showed a credit balance of D 54,900 as on the same date. A detailed comparison of entries revealed the following: (i) Customers' cheques amounting to D 8,450 had not been credited by the bank as at 31/12/2016. (ii) Cheques amounting to D 8,850 had not been presented for payment as at 31/12/2016. (iii) Bank charges of D 1,000 and interest on investments of D 2,500 collected by the banker appeared only in the bank statement. (iv) On the 30/12/2016, there was a wrong credit of D 3,500 in the bank statement. (v) Kesse Enterprise, a customer, had paid into the bank directly a sum of D 3,000 on 29th December, 2016. This had not been recorded in the cash book. (vi) A cheque for D 2,000 received from Jallo Enterprise, a customer, which was deposited had been returned unpaid. This had not been entered in the cash book.
You are required to: (a) Write up the adjusted cash book. (b) Prepare a bank reconciliation statement as at 31/12/2016.
(a) Adjusted Cash Book (D): Dr balance b/d 48,500; interest on investments 2,500; Kesse Enterprise (direct payment) 3,000 = 54,000 | Cr bank charges 1,000; Jallo Enterprise (dishonoured cheque) 2,000; balance c/d 51,000.
(b) Bank Reconciliation Statement at 31/12/2016: balance per adjusted cash book 51,000; add unpresented cheques 8,850 = 59,850; less uncredited cheques 8,450 = 51,400; add wrong credit by the bank 3,500; balance per bank statement 54,900.
Charges, interest, direct payments and the dishonoured cheque go in the cash book; the bank's wrong credit is a reconciling item.
Olu, a sole trader has the following financial details for the year ended 31st December, 2016.
Cash Book (Summary) (₦): Dr Balance b/d 6,000; Sales 10,000; Debtors 20,000 = 36,000 | Cr Creditors 12,000; Salaries 5,000; Rent and rates 4,000; Insurance 1,000; Balance c/d 14,000 = 36,000
Additional information (1st January 2016 / 31st December 2016, ₦):
Stock 4,000 / 2,000
Land and building 15,000 / 15,000
Motor vehicle 6,000 / 4,000
Debtors 2,000 / 3,000
Creditors 1,000 / 500
Insurance owing 2,000 / 6,000
You are required to prepare: (a) Statement of affairs as at 1st January, 2016. (b) Trading and Profit and Loss Account for the year ended 31st December, 2016. (c) Balance sheet as at 31st December, 2016.
(a) Statement of affairs at 1/1/2016 (₦): stock 4,000; land and building 15,000; motor vehicle 6,000; debtors 2,000; cash 6,000 = 33,000; less creditors 1,000 and insurance owing 2,000 = 3,000; capital 30,000.
(b) Sales = cash 10,000 + credit (20,000 + 3,000 − 2,000 = 21,000) = 31,000. Purchases = 12,000 + 500 − 1,000 = 11,500.
Trading: sales 31,000; opening stock 4,000 + purchases 11,500 − closing stock 2,000 = cost of sales 13,500; gross profit 17,500.
Profit and loss: salaries 5,000; rent and rates 4,000; insurance (1,000 − 2,000 + 6,000) 5,000; depreciation of motor vehicle (6,000 − 4,000) 2,000 = 16,000. Net profit ₦1,500.
(c) Balance sheet at 31/12/2016: fixed assets – land and building 15,000; motor vehicle 4,000 = 19,000. Current assets – stock 2,000; debtors 3,000; cash 14,000 = 19,000; less creditors 500 and insurance owing 6,000 = 6,500; working capital 12,500. Net assets 31,500. Capital 30,000 + net profit 1,500 = 31,500.
Opening capital from the statement of affairs; sales and purchases from the debtors and creditors movements.
Boyson social Club presented the following statements for the year ended 31st December, 2016.
Boyson Social Club Receipts and Payments Account (Le)
Receipts: Balance b/f 5,700; Subscriptions 54,500; Bar Sales 13,040; Fun fair proceeds 4,300; Donations 2,000; Life membership dues 5,400; Sale of magazines 12,560 = 97,500
Payments: Maintenance of building 12,600; Maintenance of grounds 6,400; Prizes for fun fair 8,400; Bar purchases 8,000; Bar expenses 2,000; Funeral expenses 10,200; Staff salaries 30,000; General expenses 3,600; Donations to hospital 12,500; Printing of magazines 5,300; Balance c/d 11,000 = 97,500
Additional Information (01/01/16 / 31/12/16, Le):
Subscription-in-arrears 3,900 / 7,400
Subscription-in-advance 8,400 / 6,300
Bar debtors 2,630 / 3,930
Bar stock 1,500 / 2,200
Bar expenses owing 540 / 370
Five new members had not paid membership dues of Le 300 each for the year.
You are required to prepare for Boyson Social Club for the year ended 31/12/16. (a) Subscriptions Account (b) Bar Trading Account (c) Income and Expenditure Account for the year ended 31st December, 2016.
(a) Subscriptions Account (Le): Dr balance b/d (arrears) 3,900; income and expenditure 60,100; balance c/d (advance) 6,300 = 70,300 | Cr balance b/d (advance) 8,400; cash 54,500; balance c/d (arrears) 7,400 = 70,300.
(b) Bar Trading Account: sales (13,040 + 3,930 − 2,630) 14,340; opening stock 1,500 + purchases 8,000 − closing stock 2,200 = cost of sales 7,300; gross profit 7,040; less bar expenses (2,000 + 370 − 540) 1,830; bar profit 5,210.
(c) Income and Expenditure Account: Income – subscriptions 60,100; bar profit 5,210; fun fair proceeds 4,300; donations 2,000; membership dues (5,400 + 5 × 300 unpaid) 6,900; sale of magazines 12,560 = 91,070. Expenditure – maintenance of building 12,600; maintenance of grounds 6,400; prizes for fun fair 8,400; funeral expenses 10,200; printing of magazines 5,300; staff salaries 30,000; general expenses 3,600; donations to hospital 12,500 = 89,000. Surplus of income over expenditure Le 2,070.
Subscription income from the account; the five members' unpaid dues (1,500) are added to membership-dues income.
The trial balance of Obinah for year ended 31st December, 2016 was provided as follows: (Dr / Cr, ₦)
Capital / 630,000
Drawings 69,000
Opening stock 300,000
Purchases and Sales 1,050,000 / 1,200,000
Returns 15,000 / 18,600
Debtors and Creditors 29,400 / 21,000
Provision for doubtful debts / 2,400
Salaries 90,000
Rates 18,000
Insurance 93,000
Telephone 3,000
Furniture at cost 120,000
Machinery at cost 90,000
Provision for depreciation: Furniture / 30,000; Machinery / 15,000
Bad debts 600
Bank balance 39,000
Totals 1,917,000 / 1,917,000
Additional information: i. Closing stock 31/12/16 ₦360,000 ii. Rates prepaid ₦1,500 iii. Telephone outstanding ₦660 iv. Accrued salaries ₦15,000 v. Provision for doubtful debts is to be increased to 10% of debtors vi. Depreciation on furniture at 10% on book value. vii. Depreciation on machinery at 20% on cost.
You are required to prepare for Obinah The Trading, Profit and Loss Account for the year ended 31st December, 2016 and a Balance Sheet as at that date
Trading (₦): sales 1,200,000 − returns inwards 15,000 = 1,185,000; opening stock 300,000 + purchases (1,050,000 − 18,600 = 1,031,400) = 1,331,400 − closing stock 360,000 = cost of sales 971,400; gross profit 213,600.
Profit and loss: salaries (90,000 + 15,000) 105,000; rates (18,000 − 1,500) 16,500; insurance 93,000; telephone (3,000 + 660) 3,660; bad debts 600; increase in provision (2,940 − 2,400) 540; depreciation – furniture (10% × 90,000) 9,000, machinery (20% × 90,000) 18,000 = 246,300. Net loss ₦32,700.
Balance Sheet at 31/12/2016: furniture 120,000 − 39,000 = 81,000; machinery 90,000 − 33,000 = 57,000; total 138,000. Current assets: stock 360,000; debtors 29,400 − 2,940 = 26,460; rates prepaid 1,500; bank 39,000 = 426,960. Less current liabilities: creditors 21,000; accrued salaries 15,000; telephone 660 = 36,660. Working capital 390,300. Net assets 528,300.
Capital 630,000 − net loss 32,700 − drawings 69,000 = 528,300.
Adjust each expense before charging it; this business makes a net loss.