Question

Jane was a partner at a law firm earning $223,000 per year. She left the firm to open her own law practice. In the first year of business she generated revenues of $347,000 and incurred explicit costs of $163,000. Jane’s accounting profit from her first year in her own practice is__________.A. -$39,000.B. $124,000.C. $163,000.D. $184,000.

Answer 1

Answer:

accounting profit from her first year  =  $184000

so correct option is D. $184,000

Explanation:

given data

earning = $223,000 per year

generated revenues = $347,000

explicit costs = $163,000

to find out

accounting profit from her first year

solution

we know that accounting profit is the difference between explicit cost and explicit revenue so

we get accounting profit from her first year is as

accounting profit from her first year = generated revenues  - explicit costs  .................1

put here value we get

accounting profit from her first year  = $347000 - $163000

accounting profit from her first year  =  $184000

so correct option is D. $184,000