Question

nd Recognition Inc. performs advertising services for several Fortune 500 companies. The following information describes Carrico's activities during 2019. of 2019, customers owed Carrico $45,800 for advertising services performed during 2018. During 2019, Carrico performed an additional $695 Tico collected $708,700 cash from customers during 2019. g of 2019, Carrico had $13,350 of supplies on hand for which it owed suppliers $8,150. During 2019, Carrico purchased an additional $14,600 ol d $19,300 cash owed to suppliers for goods previously purchased on credit. Carrico had $2,230 of supplies on hand at the end of 2019. operating including supplies expense) and interest expenses were $437,600 and $133,400, respectively. rico's 2019 income before taxes. WW ending balance of accounts receivable, the supplies used, and the ending balance of accounts payable. Enter all amounts as positive values. 32,200 of accounts receivable S 25,720 3450 e of accounts payable

How would I calculate Carrico's 2019 income before taxes? please help

Answer 1

Solution:-

Service Revenue	695,100
Less: Supplies Expense	25,720	=13,350+14600-2230
Operating Expenses	437600
Net Operating Income	231,780
Less: Interest Expense	133,400
Income before taxes	98,380
Beginning Accounts receivable	45,800
Add: services made during 2019	695,100
Less: Collections during 2019	(708,700)
Ending Accounts Receivable	32,200
Beginning Supplies	13,350
Add: purchase during 2019	14,600
Less: Ending Supplies	(2,230)
Supplies Used	25,720
Beginning Accounts Payable	8,150
Add: purchase made during 2019	14,600
Less: Payments made during 2019	(19,300)
Ending Accounts Payable	3,450