Question

Question 7 The Sandhill Company has disclosed the following financial information in its annual reports for the period ending March 31, 2017: sales of $1.68 million, cost of goods sold of $810,600, depreciation expenses of $175,000, and interest expenses of $89,575. Assume that the firm has an average tax rate of 35 percent. What is the company’s net income? Set up an income statement to answer the question. (Round answers to 2 decimal places, e.g. 15.25) Sandhill Company Income Statement Amount $ $ $ $ $ Click if you would like to Show Work for this question: Open Show Work

Sandhill Company Income Statement March 31, 2017For the period ended on March 31, 2017For the year ended on March 31, 2017
		Amount
Net Income / (Loss)Earnings Before Interest and TaxesInterestEarnings Before TaxesDepreciationTaxesRevenuesEarnings Before Interest, Taxes, Depreciation, and AmortizationCost of Goods Sold		$
TaxesNet Income / (Loss)InterestCost of Goods SoldEarnings Before TaxesEarnings Before Interest, Taxes, Depreciation, and AmortizationDepreciationEarnings Before Interest and TaxesRevenues
TaxesCost of Goods SoldInterestEarnings Before Interest, Taxes, Depreciation, and AmortizationNet Income / (Loss)DepreciationEarnings Before Interest and TaxesEarnings Before TaxesRevenues		$
Cost of Goods SoldEarnings Before TaxesRevenuesNet Income / (Loss)Earnings Before Interest, Taxes, Depreciation, and AmortizationEarnings Before Interest and TaxesTaxesDepreciationInterest
Earnings Before TaxesCost of Goods SoldNet Income / (Loss)Earnings Before Interest, Taxes, Depreciation, and AmortizationRevenuesInterestDepreciationEarnings Before Interest and TaxesTaxes		$
Cost of Goods SoldDepreciationNet Income / (Loss)Earnings Before Interest and TaxesInterestEarnings Before Interest, Taxes, Depreciation, and AmortizationTaxesRevenuesEarnings Before Taxes
DepreciationEarnings Before Interest, Taxes, Depreciation, and AmortizationRevenuesTaxesCost of Goods SoldEarnings Before Interest and TaxesInterestEarnings Before TaxesNet Income / (Loss)		$
Earnings Before Interest and TaxesNet Income / (Loss)InterestTaxesCost of Goods SoldRevenuesEarnings Before Interest, Taxes, Depreciation, and AmortizationEarnings Before TaxesDepreciation
DepreciationNet Income / (Loss)InterestEarnings Before Interest, Taxes, Depreciation, and AmortizationEarnings Before Interest and TaxesEarnings Before TaxesRevenuesTaxesCost of Goods Sold		$

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Answer 1

Prepare the income statement of S Company, using MS-excel as shown below:

D. 3 Income Statement of S Company 4 for the year ended 31st March 2017 5 Particulars / Amount 6 Sales 1680000 7 Cost of goods sold -810600 Depreciation expenses -175000 9 Interest expenses -89575 10 Profit before tax =SUM(D6:D9) | Tax@35% =(D10*35% 12 13 Net income =D10-D11)

The result of the above table is as follows:

D 3 Income Statement of S Company 4 for the year ended 31st March 2017 5 Particulars Amount 6 Sales $ 1,680,000 7 Cost of goods sold ($ 810,600) Depreciation expenses ($ 175,000) 9 Interest expenses ($ 89,575) Profit before tax $ 604,825 Tax@35% $ 211,688.75 10 12 13 Net income $ 393,136.25

Hence, the net income is $393,136.25.