The Ivanhoe Company has disclosed the following financial information in its annual reports for the period ending March 31, 2017: sales of $1.70 million, cost of goods sold of $813,400, depreciation expenses of $175,000, and interest expenses of $89,575. Assume that the firm has an average tax rate of 35 percent. What is the company's net income? Set up an income statement to answer the question. (Round answers to 2 decimal places, e. g. 15.25)

Question

Business

Damion Lopez

9 March, 03:40

The Ivanhoe Company has disclosed the following financial information in its annual reports for the period ending March 31, 2017: sales of $1.70 million, cost of goods sold of $813,400, depreciation expenses of $175,000, and interest expenses of $89,575. Assume that the firm has an average tax rate of 35 percent. What is the company's net income? Set up an income statement to answer the question. (Round answers to 2 decimal places, e. g. 15.25)

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Abel Herring · Answer 1

The company's net income is $404,316.

Explanation:

Ivanhoe Company

Income statement for the period ended March 31, 2017

$

Sales 1,700,000

Cost of goods sold (813,400)

Gross Income 886,600

Depreciation expense (175,000)

Operating Income 711,600

Interest expense (89,575)

Income before Tax 622,025

Tax rate 35% (217,709)

Net Income 404,316