The Nellie Company has provided the following information: Operating expenses were $115,000;
Gross profit was $629,000;
Cost of goods sold was $470,000;
Interest expense was $17,000;
Extraordinary loss was $29,000;
Income tax expense was $199,000.
What was Nellie's income before taxes?
A) $514,000.
B) $468,000.
C)$497,000.
D)$298,000.

Question

Quizplus · Accepted Answer

Income before taxes can be calculated as:
Gross profit - Cost of goods sold - Operating expenses - Interest expense - Extraordinary loss = Income before taxes
$629,000 - $470,000 - $115,000 - $17,000 - $29,000 = $497,000.

The Nellie Company Has Provided the Following Information: Operating Expenses