During the year, Belyk Paving Co. had sales of $2,386,000. Cost of goods sold, administrative and...

During the year, Belyk Paving Co. had sales of $2,386,000. Cost of goods sold, administrative and selling expenses, and depreciation expense were $1,439,000, $436,400, and $491,400, respectively. In addition, the company had an interest expense of $216,400 and a tax rate of 30 percent. (Ignore any tax loss carryback or carryforward provisions.) a. What is the company’s net income?

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Expert Solution

Sales		2,386,000
Less:	Cost of goods sold	1,439,000
Gross profit		947,000
Less:	administrative and selling expenses	436,400
	Depreciation expense	491,400
EBIT		19,200
Less:	Interest	216,400
Income Before Income Tax (EBT)		(197,200)
Less: Income Tax@30% *		-
Net Income		(197,200)

* The company does not have any profit during the year, so no tax.

jeff jeffy answered 1 year ago

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