Question

"​At the end of its third year of​ operations, the Sandifer Manufacturing Co. had $ 4,597,000 in​ revenues, $ 3,399,000 in cost of goods​ sold, $ 448,000 in operating expenses which included depreciation expense of $ 157,000​, 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?"

Answer 1

Answer:

Net Income     $ 495,000

Explanation:

The net income represent the amount that would be left after all expenses have been deducted from all the sales revenue.

                                                                                   $                                                                        

Sales revenue                                                   4,597,000

Cost of goods sold                                            (3,399,000)

Gross profit                                                            1,198,000

Operating expenses                                          (448,000)

Profit before taxes                                                750,000

Taxes          (34%×750,000)                                (255,000)

Net Income                                                           495,000