Frederickson Office Supplies recently reported $10,000 of sales, $7,250 of operating costs other than depreciation, and $1,250 o

Question

2 years ago

15

Frederickson Office Supplies recently reported $10,000 of sales, $7,250 of operating costs other than depreciation, and $1,250 o

f depreciation. The company had no amortization charges and no non-operating income. It had $8,000 of bonds outstanding that carry a 7.5% interest rate, and its federal-plus-state income tax rate was 25%. How much was the firm's taxable income, or earnings before taxes (EBT)?
Select the correct answer.
a. $1,200 b. $1,000 c. $900 d. $1,300

Business