Question

The DeGrange Carpentry Shop, s sole proprietorship has ssles of $398.600, costs of $254 noo, depreciation expente of 526,400 interest expense of $1,000, and a tax rate of 21 percent. What is the net income for this firm?

Answer 1

The net income for the DeGrange Carpentry Shop is -$461,978, indicating a loss.

Step-by-step explanation:

The net income for the DeGrange Carpentry Shop can be calculated by subtracting all the expenses and taxes from its sales. The given information states that the shop has sales of $398,600, costs of $254,000, depreciation expense of $526,400, interest expense of $1,000, and a tax rate of 21 percent.

To calculate the net income, we need to subtract the costs and expenses from the sales. Here's the calculation:

1. Subtract the costs of $254,000 from the sales of $398,600:
   
   $398,600 - $254,000 = $144,600
2. Subtract the depreciation expense of $526,400 from the previous result:
   
   $144,600 - $526,400 = -$381,800
3. Calculate the interest expense by applying the tax rate of 21 percent:
   
   $381,800 * 0.21 = $80,178
4. Subtract the interest expense from the previous result to get the net income:
   
   -$381,800 - $80,178 = -$461,978

The net income for the DeGrange Carpentry Shop is -$461,978. This indicates a loss.