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8 July, 01:26

Rogue Industries reported the following items for the current year: Sales = $3,000,000; Cost of Goods Sold = $1,500,000; Depreciation Expense = $170,000; Administrative Expenses = $150,000; Interest Expense = $30,000; Marketing Expenses = $80,000; and average tax rate = 40%. What is the company's Net Income? Try answering the question by recreating the company's entire Income Statement as much as possible.

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  1. 8 July, 01:53
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    Net Income = $642,000

    Explanation:

    Income Statement

    Sales 3,000,000

    Less: Cost of Goods Sold (1,500,000)

    Gross Profit 1,500,000

    Less: Administrative Expenses (150,000)

    Marketing Expenses (80,000)

    Depreciation Expense (170,000)

    Operating Income 1,100,000

    Less: Interest Expense (30,000)

    Earnings before Taxes 1,070,000

    Less: Taxes (40%) (428,000)

    Net Income 642,000
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