Question

. The Aztec Book Company sold 1,400 finance textbooks to High Tuition College for $84 each in 20XX. These books cost $63 to produce. In addition, Aztec Books spent $2,000 (selling expense) to persuade the college to buy its books. Aztec Books borrowed $50,000 on January 1, 20XX, on which it paid 10 percent interest. Both interest and principal were paid on December 31, 20XX. Aztec Books' tax rate is 20 percent. Amortization expense for the year was $5.000. Did Aztec Books make a profit in 20XX? Verify your answer with an income statement presented in good form.

Answer 1

Aztec Book Company Income Statement for the year 20XX ($ 84 x 1400) ($ 63 x 1400) Sales Cost of Goods sold Gross Profit Selling Expenses Interest Expenses Profit Before Tax Tax @ 20% Profit After Tax Amounts $ 1,17,600 $ 88,200 $ 29,400 $ 2,000 $ 5,000 $ 22,400 $ 4,480 $ 17,920 ($ 50,000 x 10%) Aztec Books did made a Net Profit of $ 17,920 during the year

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