Net income for the firm = $161,500
Step-by-step explanation:
Step 1 :
Total sales of the goat farm = $671,000
Cost incurred = $333,000
Depreciation expense = $77,000
Interest expense = $48,500
We need to compute the net income of the firm
Step 2 :
The profit before tax can be computed by subtracting all the expenses from the sale.
Total expenses of the firm = 333,000 + 77,000+ 48,500 = $458,500
Profit before tax = 671,000 - 458,500 = $212,500
Step 3 :
Percentage of tax for the firm = 24%
Amount of tax for the firm = 24% of 212500 = 51000
Net income = Total profit after tax = 212500 - 51000 = 161,500
Step 4 :
Answer :
Net income for the firm = $161,500
