Question

At the end of its third year of​ operations, the Sandifer Manufacturing Co. had $ 4 comma 580 comma 000 in​ revenues, $ 3 comma 321 comma 000 in cost of goods​ sold, $ 453 comma 000 in operating expenses which included depreciation expense of $ 158 comma 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:

The net income of the firm for the​ year is $531,960

Explanation:

Income before tax of Sandifer Manufacturing Co.  (taxable income) = Revenues - Cost of goods​ sold - Operating expenses = $4,580,000 - $3,321,000 - $453,000 = $806,000

Tax liability equal to 34 percent of the​ firm's taxable income.

The amount of tax the firm had to pay = $806,000 x 34% = $274,040

Net income = Income before tax - Tax liability = $806,000 - $274,040 = $531,960