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O’Henry Data Services: Statement of Business Income, Essay Example
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Revenues 7900
Adjustments 2100
Total revenue 10000
Less: cost of sales (3800)
Gross income 6200
Add: service revenue 14300
Unearned service revenue (6700) 7600
Total income 13800
Less: Expenses
Salary 3400
Utilities 900
Manager’s salary 3000
Adjustments 2750
Prepaid expenses (2600) 7450
Net income 6350
The most I would pay would therefore be 6350 x 20 = 127,000
The least amount O’Henry will take for his business would be:
Capital 137400
Withdrawals (2000)
Net Income 6350
Ending capital 141750
I should offer him $127,000 because this is the most amount I can offer and it is lower compared to the amount he can least take.
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