8 June, 13:28

# Griffin's Goat Farm, Inc., has sales of \$796,000, costs of \$327,000, depreciation expense of \$42,000, interest expense of \$34,000, and a tax rate of 21 percent. What is the net income for this firm

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1. 8 June, 14:31
0
Net Income = \$310,470

Explanation:

Given:

Sales during the year = \$796,000

Cost of goods sold = \$327,000

Depreciation expenses = \$42,000

Interest expense = \$34,000

Tax rate = 21%

Net income during the year = ?

Computation of net income:

Particular Amount

Sale value \$796,000

Less: Cost \$327,000

Less: Depreciation \$42,000

Less: Interest expense \$34,000

Gross profit \$393,000

Less: Tax 21% of G. P \$82,530

Net Income \$310,470

Therefore, net income for the firm is \$310,470
2. 8 June, 16:53
0

Explanation:

According to the scenario, the computation of the given data are as follows:

First we calculate gross profit:

Gross profit = Sales - Cost of Goods Sold = \$796,000 - \$327,000 = \$469,000

Now, Earnings Before Tax = Gross profit - Depreciation - Interest

= \$469,000 - \$42,000 - \$34,000 = \$393,000

So, Net income = Earnings Before Tax - Tax percent on EBT

= \$393,000 - 21% * \$393,000

= \$393,000 - \$82,530

= \$310,470