Question

Presented below are selected ledger accounts of Coronado Corporation as of December 31, 2020. Cash $51000 Administrative expenses 102000 Selling expenses 81600 Net sales 550800 Cost of goods sold 214200 Cash dividends declared (2020) 20400 Cash dividends paid (2020) 15300 Discontinued operations (loss before income taxes) 40800 Depreciation expense, not recorded in 2019 30600 Retained earnings, December 31, 2019 91800 Effective tax rate 20%Compute net income for 2020.

Answer 1

Answer:

The net income for 2020 is $171,360

Explanation:

The computation of the net income is shown below:

=  Net sales -  Cost of goods sold - Administrative expenses - Selling expenses - Discontinued operations  - income tax expense

= $550,800 - $214,200 - $81,600 - $40,800 - $42,840

= $171,360

The income tax expense is computed below:

= (Net sales -  Cost of goods sold - Administrative expenses - Selling expenses - Discontinued operations) × income tax rate

= $214,200 × 20%

= $42,840