Question

Suppose Ruston Company has the following revenue and expenses for 2018:

Revenues of $7,800,000
Cost of Goods Sold of $1,560,000
Depreciation Expenses of $700,000
Income Taxes of $1,676,000
Interest Expenses of $70,000
Other Expenses of $500,000
Sales, General, & Administrative Expenses of $780,000

Use an income statement with amounts in thousands

A) What is the value of Pre-Tax Income? and B) What is the value of Net Income?

Please specify your answer in the same units as the income statement.

Answer 1

A)

Revenues		7,800,000
Less: Expenses:
Cost of goods sold	1,560,000
Depreciation expense	700,000
Interest expenses	70,000
Other expenses	500,000
Sales, general, & administrative expense	780,000
Total operating and non-operating expenses		3,610,000
Pre-Tax income		4,190,000

Therefore, pre-tax income is 4,190,000.

B)

Pre-tax income	4,190,000
Less: Income taxes	1,676,000
Net income	2,514,000

Therefore, the net income is 2,514,000.