Question

Flip's Pizzeria Inc. has the following financial items for the current year: Advertising Expenses $50,000 Cost of Goods Sold $400,000 Other Operating Expenses $395,000 Sales $2,340,000 Cost of Equipment purchased during the year (10 year estimate useful life, O salvage value) $505,000 Calculate Flip's taxable liability for the current year. Answer is complete but not entirely correct. B C D A E 2 Taxable Liability = $ 303,345

Answer 1

Sales	$      2,340,000
Less: COGS	$         400,000
Gross Profit	$      1,940,000
Less:
Depreciation	$           50,500
Advertising expense	$           50,000
other operating expense	$         395,000
Net operating income	$      1,444,500
Taxable income  = NOI	$      1,444,500
Tax liability for the current year @21%	$         303,345