Question

Tax project

The Forecast and Budget Department of XYZ Corporation (involved in the retail trade business) has developed the following selected financial information for the year 2019:

$

· Gross receipts 25,800,000

· Cost of goods sold 21,300,000

· Dividends received (less than 20%-owned) 150,000

· Interest Income 50,000

· Interest Expense 850,000

· Depreciation 575,000

· Other Operating Expenses 1,500,000

XYX is planning a major expansion project for the year 2020 and is in the process securing the needed financing. Financial approval is dependent upon the company averaging Net Income of at least $750,000 for the last three years. Net income for 2017 and 2018 was $875,000 and $925,000 respectively. Your boss the Vice President of Financial Operations has asked you to use the numbers above and calculate Net Income for 2019 to see if it meets or exceeds the target of $750,000.

Answer 1

Hi...Friend,

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And please excuse my bad handwriting.

Amount in ANSE & Carculation of Net Income for the year 2018! Amount in $ (A) Gruss Receipt 25800000 (B) Operating Expense, A cast of Goods sold 21300000 # Depreciation 575000 A other operating expenses 1500.000 233 75000 / 2425000 Total Operating expense : (3) © Operating Income CA-B) Other Income on [Empense): A Dividend received ® 150000 50000 * Interest income * Interest expense Total other income on Empense :(0) (850000) 1650.000) $1775000 Wer home (C+D]

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