During the fiscal year ended 2014, a company had revenues of $400,000, cost of goods sold of $280,000, and an income tax rate of 30 percent on income before income taxes. What was the company's 2014 net income?

Question

Quizplus · Accepted Answer

Net income can be calculated as: 
Revenue - Cost of Goods Sold - Income Tax = Net Income
Substituting the values for the given fiscal year: 
$400,000 - $280,000 - ($400,000 - $280,000)*30% = $120,000*30% = $36,000
Therefore, the correct answer is option B). $36,000.

During the Fiscal Year Ended 2014, a Company Had Revenues