Mart's Boutique has sales of $670,000 and costs of $460,000. Interest expense is $50,000 and depreciation is $55,000. The tax rate is 34%. What is the net income?

Question

Quizplus · Accepted Answer

Net income can be calculated using the formula:

Net Income = Sales - Costs - Interest - Depreciation - Taxes

Given:

Sales = $670,000

Costs = $460,000

Interest = $50,000

Depreciation = $55,000

Tax rate = 34%

Substituting the values:

Net Income = $670,000 - $460,000 - $50,000 - $55,000 - (0.34 * ($670,000 - $460,000 - $50,000 - $55,000))

Net Income = $69,300

Therefore, the best choice is (B) $69,300.

Mart's Boutique Has Sales of $670,000 and Costs of $460,000