Question

During the fiscal year, a company had revenues of $400,000, cost of goods sold of $280,000, and an income tax rate of 30 percent on income before income taxes. What was the company's net income for the year

Answer 1

Answer:

$84,000

Explanation:

A company's net income can be determined by subtracting the cost of goods sold from the revenues to obtain the income before taxes and then multiply it by one minus the tax rate.

If revenues are $400,000 and cost of goods sold are $280,000 at a tax rate of 30%, net income for the year is:

$N=(\ 400,00-\ 280,000)*(1-0.3)\\N=\ 84,000$

The company's net income for the year is $84,000.