Cashway Lumber has sales of $700,000, depreciation of $98,000, costs of goods sold of $392,000, interest...

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Question

Cashway Lumber has sales of $700,000, depreciation of $98,000, costs of goods sold of $392,000, interest expense of $49,000 and a tax rate of 25%, what is their net income? Answers should not include commas (for example, if the answer is 11,275, it should be entered 11275). Answer:

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Answer 1

Answer #1

Net income before tax

= Sales - (depreciation + cost of goods sold + interest expense)

= 700000 - (98000 + 392000 + 49000)

= 161000

Thus, tax paid = 25% of 161000 = 40250

Net income after tax

= Sales - (depreciation + cost of goods sold + interest expense + tax)

= 700000 - (98000 + 392000 + 49000 + 40250)

= 120750

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Answer 2

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Cashway Lumber has sales of $700,000, depreciation of $98,000, costs of goods sold of $392,000, interest...

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Cashway Lumber has sales of $700,000, depreciation of $98,000, costs of goods sold of $392,000, interest...