Question

The Carpentry Shop has sales of $398,600, costs of $254,800, depreciation expense of $26,400, interest expense of $1,600, and a tax rate of 34 percent. What is the net income for this firm?

Answer 1

Answer:

$76,428

Explanation:

Given that,

Sales = $398,600

Costs = $254,800

Depreciation expense = $26,400

Interest expense = $1,600

Tax rate = 34 percent

Income before tax:

= Sales - costs - Depreciation expense - Interest expense

= $398,600 - $254,800 - $26,400 - $1,600

= $115,800

Net income:

= Income before tax - (Income before tax × Tax rate)

= $115,800 - ($115,800 × 34%)

= $115,800 - $39,372

= $76,428