If the tax rate is 30%, interest expense is $15,000 and operating profit is $82,000, what is the profit for the year?

Question

Quizplus · Accepted Answer

Profit before tax = Operating profit - Interest expense
Profit before tax = $82,000 - $15,000 = $67,000
Profit for the year = Profit before tax - Tax
Tax = 30% of Profit before tax = 0.3 x $67,000 = $20,100
Profit for the year = $67,000 - $20,100 = $46,900
Therefore, the profit for the year is $46,900, which is option C.

If the Tax Rate Is 30%, Interest Expense Is $15,000