Question

What will be the net income or loss on the income statement assuming a tax rate of 30.00%
(identify if the value will be a net income or a net loss)

Accounts as shown on a Trial Balance
on December 31, 2013
	DB	CR
Accounts Payable		7,600.00
Accounts Receivable	9,000.00
Accumulated Amortization		1,000.00
Accumulated Depreciation		2,000.00
Add'l Paid-in-Capital		25,905.00
Bond Investment	13,000.00
Cash	22,500.00
Common Stock		5,000.00
Cost of Goods Sold	125,000.00
Current Portion of Notes Payable		6,500.00
Discontinued Operations, gross of tax	10,000.00
Furniture, Fixtures & Equipment	25,500.00
Gain/Loss on Asset Disposal		700.00
Income Tax Expense	?
Interest Expense	800.00
Interest Payable		800.00
Inventory	22,000.00
Notes Payable		13,000.00
Operating Expenses	66,050.00
Sales		250,000.00
Trademark	4,000.00

Answer 1

Answer

--The NET INCOME = $ 34,195

--Working

Sales		$250,000
Cost of Goods Sold		$125,000
Gross Profits		$125,000
Operating Expenses		$66,050
Operating Income		$58,950
Other Income (Expenses):
Discontinued Operations, gross of tax	($10,000)
Gain/Loss on Asset Disposal	$700
Interest Expense	($800)	($10,100)
Net Income (Loss) before Income Tax		$48,850
Income tax expense 30%		$14,655
Net Income (Loss)		$34,195