Bellflower, Inc. is a small company that sells coffee mugs that feature local artists from their region. Jeff, the chief financial officer (CFO), is in the process of compiling a Budgeted Income Statement for 2024 so that they can apply for a loan at their local bank. Jeff has budgeted for sales of 10,000 mugs at a sales price of $12.50 per mug. They originally paid $3.75 per mug when they acquired them. They have selling, general & admin (SG&A) expenses of $39,750 and have an existing loan of $5,000 with an annual percentage rate (APR) of 2%. Their tax rate is a flat 21%. What is the amount of income tax expense that Jeff will report on the budgeted income statement for 2024?

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The Answer of Bellflower, Inc. is a small company that sells coffee mugs that feature local artists from their region. Jeff, the chief financial officer (CFO), is in the process of compiling a Budgeted Income Statement for 2024 so that they can apply for a loan at their local bank. Jeff has budgeted for sales of 10,000 mugs at a sales price of $12.50 per mug. They originally paid $3.75 per mug when they acquired them. They have selling, general & admin (SG&A) expenses of $39,750 and have an existing loan of $5,000 with an annual percentage rate (APR) of 2%. Their tax rate is a flat 21%. What is the amount of income tax expense that Jeff will report on the budgeted income statement for 2024?