Question

Pretax Income From Percentage-Of- Completion Completed Contract Difference 2017 $1,024,000 $657,000 $367,000 2018 1,280,000 821,250 458,750 (a) Incorrect answer iconYour answer is incorrect. Assuming that the tax rate is 40%, what is the amount of net income that would be reported in 2018

Answer 1

Answer: $768,000

Step-by-step explanation:

In 2018 the Net income is based on the pretax income from percentage of completion of $1,280,000.

Net income = Pretax income * ( 1 - tax rate)

= 1,280,000 * (1 - 40%)

= $768,000