Question

Griffin's Goat Farm, Inc., has sales of $796,000, costs of $327,000, depreciation expense of $42,000, interest expense of $34,000, and a tax rate of 21 percent. What is the net income for this firm? (Do not round intermediate calculations.)

Answer 1

$310,470

Step-by-step explanation:

Given that,

Sales = $796,000,

Costs = $327,000,

Depreciation expense = $42,000,

Interest expense = $34,000,

Tax rate = 21 percent

Income before tax:

= Sales - cost - depreciation - interest expense

= $796,000 - $327,000 - $42,000 - $34,000

= $393,000

Net income:

= Income before tax - (Income before tax × tax rate)

= $393,000 - ($393,000 × 21%)

= $393,000 - $82,530

= $310,470

Therefore, the net income for this firm is $310,470.