You know the following information about the Taylor National Bank: $\begin{array} { l r }
\text { Provision for loan losses } & \$ 100 \
\text { Income taxes } & 140 \
\text { Noninterest income } & 500 \
\text { Dividends } & 60 \
\text { Securities gains (losses) } & 50 \
\text { Interest income } & 1,500 \
\text { Noninterest expense } & 750 \
\text { Interest expenses } & 750
\end{array}$
Given this information,what is the value of this firm's net income?

Question

You know the following information about the Taylor National Bank: $\begin{array} { l r } 
\text { Provision for loan losses } & \$ 100 \
\text { Income taxes } & 140 \
\text { Noninterest income } & 500 \
\text { Dividends } & 60 \
\text { Securities gains (losses) } & 50 \
\text { Interest income } & 1,500 \
\text { Noninterest expense } & 750 \
\text { Interest expenses } & 750
\end{array}$
Given this information,what is the value of this firm's net income?

Quizplus · Accepted Answer

Net income is calculated by taking the total revenues and subtracting the total expenses. Here, total revenues include interest income, noninterest income, and securities gains, which sum up to $1,500 + 500 + 50 = 2,050$. Total expenses include interest expenses, noninterest expense, provision for loan losses, and income taxes, which sum up to $750 + 750 + 100 + 140 = 1,740$. Subtracting total expenses from total revenues gives a net income of $2,050 - 1,740 = 310$. However, dividends are not an expense but a distribution of earnings, so they should not be subtracted in the calculation of net income. Therefore, the correct calculation for net income is $310$, which is not an option provided, indicating a mistake in my explanation. Reevaluating the correct approach: Total revenues (interest income + noninterest income + securities gains) = $1,500 + 500 + 50 = 2,050$. Total expenses (interest expenses + noninterest expense + provision for loan losses + income taxes) = $750 + 750 + 100 + 140 = 1,740$. Net income = Total revenues - Total expenses = $2,050 - 1,740 = 310$. Given the options, it seems there was a mistake in my initial calculation or explanation, as the correct net income based on the provided options and calculations should be reconsidered. Correct calculation: Net Income = Interest Income + Noninterest Income + Securities Gains - Interest Expenses - Noninterest Expense - Provision for Loan Losses - Income Taxes = $1,500 + 500 + 50 - 750 - 750 - 100 - 140 = 310$. The error in my explanation was not accounting for the correct interpretation of the options provided. The correct answer should be derived directly from the calculation based on the given financial figures.

You Know the Following Information About the Taylor National Bank