If a company's net sales for the year are \$500,000 and its total expenses are \$400,000, how much profit does the company make at the end of the year?

• A. \$140,000
• B. \$100,000
• C. \$120,000
• D. \$2

Answer: (B)

Verified step by step guidance

1. Step 1: Understand the concept of profit. Profit is calculated as the difference between net sales (revenue) and total expenses. The formula is: $\mathrm{Profit}=\mathrm{Net}\mathrm{Sales}-\mathrm{Total}\mathrm{Expenses}$.
2. Step 2: Identify the given values in the problem. Net sales are provided as \$500,000, and total expenses are \$400,000.
3. Step 3: Substitute the given values into the profit formula. This step involves replacing 'Net Sales' with 500,000 and 'Total Expenses' with 400,000 in the formula: $\mathrm{Profit}=\mathrm{500,000}-\mathrm{400,000}$.
4. Step 4: Perform the subtraction operation to find the profit. Subtract total expenses from net sales to determine the company's profit.
5. Step 5: Compare the calculated profit to the multiple-choice options provided in the problem to identify the correct answer.