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4 October, 06:23

At the end of its third year of operations, the Sandifer Manufacturing Co. had $ 4 comma 580 comma 000 in revenues, $ 3 comma 321 comma 000 in cost of goods sold, $ 453 comma 000 in operating expenses which included depreciation expense of $ 158 comma 000 , and a tax liability equal to 34 percent of the firm's taxable income. What is the net income of the firm for the year?

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  1. 4 October, 07:55
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    The net income of the firm for the year is $531,960

    Explanation:

    Income before tax of Sandifer Manufacturing Co. (taxable income) = Revenues - Cost of goods sold - Operating expenses = $4,580,000 - $3,321,000 - $453,000 = $806,000

    Tax liability equal to 34 percent of the firm's taxable income.

    The amount of tax the firm had to pay = $806,000 x 34% = $274,040

    Net income = Income before tax - Tax liability = $806,000 - $274,040 = $531,960
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