Question

Cookies by casey has sales of $487,000 with costs of $263,000. interest expense is $26,000 and depreciation is $42,000. the tax rate is 21 percent. what is the net income?

Answer 1

The net income of Cookies by casey is $123,240

What is net income?

The net income of the company is the excess of its sales revenue over all costs of the running the business, which includes, the costs of sale, interest expense, depreciation as well as the taxes payable to the government authority which is 21% of profits before tax in this case.

Profit before tax=sales-costs of sale-depreciation-interest expense

sales=$487,000

costs of sale=$263,000

depreciation=$42,000

interest expense=$26,000

profit before tax=$487,000-$263,000-$42,000-$26,000

profit before tax=$156,000

tax rate=21%

net income=profit before tax*(1-tax rate)

net income=$156,000*(1-21%)

net income=$123,240

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