Using the information provided,calculate net income for 2013.Assume a tax rate of 35 percent.
Year 2013
Inventory $5,000
Revenues 200,000
Depreciation expense 5,000
Cost of goods sold 100,000
Interest expense 10,000
Operating expenses 30,000
A)$35,750
B)$44,000
C)$50,000
D)$19,250

Question

Quizplus · Accepted Answer

Net income is calculated as: Revenues - Cost of Goods Sold - Operating Expenses - Depreciation Expense - Interest Expense = Earnings Before Tax (EBT). Then, EBT - Taxes = Net Income. Here, EBT = $200,000 - $100,000 - $30,000 - $5,000 - $10,000 = $55,000. Taxes = 35% of $55,000 = $19,250. Net Income = $55,000 - $19,250 = $35,750.

Using the Information Provided,calculate Net Income for 2013