Answer:
Net Income = $20,300
Explanation:
Net income is profit earned after deducting all operating expenses and taxes from sales revenue. It is computed as follows:
$
Total sales (600,000 + 410,000) 1,010,000
less cost of goods sold (310,000 + $175,000) <u>(485,000
)</u>
Gross profit 525,000
Direct operating expenses(250,000 +115,000) (365000
)
General overhead (101,000)
Interest expense <u> (12,000) </u>
Profit before tax 47,000
Income tax <u>(26,700</u>)
Net Income <u> 20,300</u>
Net Income = $20,300