Lee’s accountant recorded the depreciation on his cottage during 2021 as $7,000. According to the accountant, what profit did Lee make?

Lee is a computer programmer who earned $35,000 in 2020. But on January 1, 2021, Lee opened a body board manufacturing business. At the end of his first year, he gave his accountant the following data:
■ He stopped renting out his cottage for $3,500 a year and used it as his factory. The market value of the cottage increased from $70,000 to $71,000.
■ He spent $50,000 on materials, phone, etc.
■ He leased machines for $10,000 a year.
■ He paid $15,000 in wages.
■ He used $10,000 from his savings account, which earns 5 percent a year interest.
■ He borrowed $40,000 at 10 percent a year.
■ He sold $160,000 worth of body boards.
■ Normal profit is $25,000 a year.