Ask Question
12 August, 09:31

For the past year, Momsen, Ltd., had sales of $46,382, interest expense of $3,854, cost of goods sold of $16,659, selling and administrative expense of $11,766, and depreciation of $6,415. If the tax rate was 35 percent, what was the company's net income?

+3
Answers (1)
  1. 12 August, 12:57
    0
    Net income = $11,412.2

    Explanation:

    Giving the following information:

    sales of $46,382

    interest expense of $3,854

    cost of goods sold of $16,659

    selling and administrative expense of $11,766

    depreciation of $6,415

    t=0.35

    We need to use the following formula:

    Net income = (sales - COGS - selling and administrative expense - interest expense - depreciation) - tax + depreciation

    First, we deduct Depreciation to decrease the tax base, but because it is not an actual payment, we have to sum it after tax.

    Sales = 46,382

    COGS = (16,659)

    Gross profit = 29,723

    Selling and administrative expense = (11,766)

    Interest = (3,854)

    Depreciation = (6,415)

    EBT = 7,688

    Tax = (7,688*0.35) = (2,690.8)

    Depreciation = 6,415

    Net income = $11,412.2
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “For the past year, Momsen, Ltd., had sales of $46,382, interest expense of $3,854, cost of goods sold of $16,659, selling and ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers