XYZ Inc., has sales of $800,000, costs of $375,000, depreciation expense of $85,000, interest expense of $50,000, and a tax rate of 35%.

XYZ Inc., has sales of $800,000, costs of $375,000, depreciation expense of $85,000, interest expense of $50,000, and a tax rate of 35%. What is the net income of this firm? (10 Points)

The income statement for the company is

(Use Excel and Excel Formulas to answer)

Solutions

Expert Solution

Sales	800000
Cost	375000
gross Profit	425000
operating Expense	85000
Operating Income	340000
Interest Expense	50000
EBT	290000
Tax	101500
Net Income	188500

Net Income = EBT - Tax
Sale -cost = GP
GP - operating expense = operating INcome
EBT = Operating income- interest expense
Depreciation is a operating expense
Tax is calculated on EBT = 290000 * 35% = 101500

jeff jeffy answered 2 years ago

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