Question

Co. XYZ has the following information on its income statement: Sales $ 50,250,000 Operating Expenses $ 10,115,000 Cost of goods sold $ 35,025,000 Interest expense $ 750,000 Income tax rate $ 34% What is the tax debt for income concept?

Answer 1

Let is construct income statement to calculate tax liability

Sales = 50250000

Less cost of goods sold = 35025000

Less operating expenses = 10115000

EBIT = 5110000

Less interest = 750000

EBT = 4360000

Less tax @34% = 1482400

Net profit = 2877600

From the above statement we calculated tax as 1482400