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Question
Use the following scenario to answer the following questions:
Babak owns a sports practice facility called Boston Batting Cages in Boston, Massachusetts. During the first year of operation, Boston Batting Cages incurred many costs. In that year, Babak spent $5,000 on labor, $2,000 on maintenance, and $1,000 on electricity. Babak took out a loan to open his business, in which he would have earned $1,500, and his previous job, which he could get back at any time, paid him $50,000.
If Boston Batting Cages received $80,000 in revenues, what were the accounting profits?
a. $20,500
b. $72,000
c. $51,500
d. $80,000
e. $50,000
Answer
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