Question

The following financial information was summarized from the accounting records of Globe Corporation for the current year ended December 31: Northern Southern Corporate Division Division Total Cost of goods sold $310,000 $175,000 Direct operating expenses 250,000 115,000 Net sales 600,000 410,000 Interest expense $12,000 General overhead 101,000 Income tax 26,700 The net income for Globe Corporation is

Answer 1

Net Income = $20,300

Step-by-step explanation:

Net income is profit earned after deducting all operating expenses and taxes from sales revenue. It is computed as follows:

$

Total sales (600,000 + 410,000) 1,010,000

less cost of goods sold (310,000 + $175,000) (485,000 )

Gross profit 525,000

Direct operating expenses(250,000 +115,000) (365000 )

General overhead (101,000)

Interest expense (12,000)

Profit before tax 47,000

Income tax (26,700)

Net Income 20,300

Net Income = $20,300