The Carpentry Shop has sales of $398, 600, costs of $254, 800, depreciation expense of $26, 400. interest expense of $ 1, 600, and a tax rate of 34 percent. What is the net income for this firm?

A. $61, 930

B. $66, 211

C. $67, 516

D. $76, 428

E. $83, 219

The correct answer is option (D).

Explanation:

According to the scenario, given data are as follows:

Total sales = $398,600

Cost of sales goods = $254,800

Depreciation expense = $26,400

Interest expense = $1,600

Tax rate = 34%

Hence, Net income can be calculated by using following formula:

Net income = (Total sales - cost of sales goods - depreciation expense - interest expense) x (1 - tax rate)

= (398,600 - 254,800 - 26400 - 1600) x (1 - 34%)

= (398,600 - 254,800 - 26400 - 1600) x (1 - 0.34)

= 115800 x 0.66

= $76,428

Hence, the correct answer is $76,428.