Question

nataro, incorporated, has sales of $663,000, costs of $325,000, depreciation expense of $69,000, interest expense of $44,500, and a tax rate of 21 percent.

Answer 1

The question involves calculating Nataro, Incorporated's net taxable income and net profit after taxes by subtracting costs, depreciation, interest expense from sales, and then applying the tax rate. Net taxable income is determined to be $224,500 and after a 21% tax rate is applied, the net profit after taxes is calculated to be $177,355.

Step-by-step explanation:

The question relates to the calculation of net taxable income and net profit after taxes for a corporation, specifically Nataro, Incorporated. To answer this, one must understand the components of a company's financial statement, such as sales, costs, depreciation, interest expense, and tax rate. Calculating the net taxable income involves subtracting costs, depreciation, and interest expense from sales. To find the net profit after taxes, we then apply the tax rate to the net taxable income and subtract the resulting tax from the net taxable income.

Here's how the calculation would go:

1. Net Taxable Income = Sales - Costs - Depreciation - Interest Expense = $663,000 - $325,000 - $69,000 - $44,500 = $224,500.
2. Taxes = Net Taxable Income * Tax Rate = $224,500 * 21% = $47,145.
3. Net Profit After Taxes = Net Taxable Income - Taxes = $224,500 - $47,145 = $177,355.

These calculations are essential in understanding a company's financial performance and profitability.