Suppose Ningbo Steel had sales revenue of $10,000 sales revenue, cost of goods sold of $5,000, operating expenses of $3000, interest expense of $1,000, a tax rate of 20%, and 1,000 shares of common stock outstanding.Based on this information, net profit after tax was:

Question

Quizplus · Accepted Answer

Net profit after tax can be calculated using the following formula:
Net Profit = Sales Revenue - Cost of Goods Sold - Operating Expenses - Interest Expense - Taxes

Using the figures given in the question:
Net Profit = $10,000 - $5,000 - $3,000 - $1,000 - ($10,000 * 0.20)
Net Profit = $10,000 - $5,000 - $3,000 - $1,000 - $2,000
Net Profit = $800

Therefore, the correct answer is option C) $800.

Suppose Ningbo Steel Had Sales Revenue of $10,000 Sales Revenue