Question

Mart's Boutique has sales of $820,000 and costs of $540,000. Interest expense is $36,000 and depreciation is $59,000. The tax rate is 21 percent. What is the net income? $146,150 221,200 105,000 139,050

Answer 1

$146,150.00

Step-by-step explanation:

Net income is net of taxes.

Here,

Sales = $820,000.00

Less: Costs = -$540,000.00

Gross profit = $280,000.00

Less: Finance Costs

Interest = -$36,000.00

Depreciation = -$59,000.00

Net profit before Tax = $185,000.00

Less: Tax @ 21% of $185,000.00 = - $38,850.00

Net Income (after tax) = $146,150

Net income is always computed after tax.

$146,150.00