Answer :
Answer:
The correct answer is $310,470.
Explanation:
According to the scenario, the computation of the given data are as follows:
First we calculate gross profit:
Gross profit = Sales - Cost of Goods Sold = $796,000 - $327,000 = $469,000
Now, Earnings Before Tax = Gross profit - Depreciation - Interest
= $469,000 - $42,000 - $34,000 = $393,000
So, Net income = Earnings Before Tax - Tax percent on EBT
= $393,000 - 21% × $393,000
= $393,000 - $82,530
= $310,470
Answer:
Net Income = $310,470
Explanation:
Given:
Sales during the year = $796,000
Cost of goods sold = $327,000
Depreciation expenses = $42,000
Interest expense = $34,000
Tax rate = 21%
Net income during the year = ?
Computation of net income:
Particular Amount
Sale value $796,000
Less: Cost $327,000
Less: Depreciation $42,000
Less: Interest expense $34,000
Gross profit $393,000
Less: Tax 21% of G.P $82,530
Net Income $310,470
Therefore, net income for the firm is $310,470