Elgin Battery Manufacturers had sales of $1,000,000 in 2015 and their cost of goods sold is $700,000. Selling and administrative expenses were $100,000. Depreciation expense was $80,000 and interest expense for the year was $10,000. The firm's tax rate is 30 percent. What is the dollar amount of taxes paid in 2015?

Question

Quizplus · Accepted Answer

To calculate the taxes paid, first determine the net income before taxes: Sales - Cost of Goods Sold - Selling and Administrative Expenses - Depreciation Expense - Interest Expense = Net Income before Taxes. So, $1,000,000 - $700,000 - $100,000 - $80,000 - $10,000 = $110,000. Then, apply the tax rate: $110,000 * 30% = $33,000.

Elgin Battery Manufacturers Had Sales of $1,000,000 in 2015 and Their