Question

A firm reports the following income statement items for FY2019: sales of $60,550,000; income tax of $1,744,000; operating expenses of $10,115,000; cost of goods sold of $34,025,000; and interest expense of $750,000. The firm also paid $947,250 in dividends in FY2019. What is the amount of the firms EBIT?

Answer 1

$16,410,000

Step-by-step explanation:

The computation of the EBIT is shown below:

= Sales - cost of goods sold - operating expenses

= $60,550,000 - $34,025,000 - $10,115,000

= $16,410,000

For calculating the Earning before interest and taxes, we deducted the cost of goods sold and the operating expense from the sales so that the accurate amount can come