Question

Sammy's Shovels had sales of $ 90,880 in 2010. The cost of goods sold was $ 34,863 , operating expenses (excluding depreciation) were $ 11,490 , interest expenses were $ 1,317 , depreciation expense was $ 7,961 , and dividends paid were $ 3,415 . The firm's tax rate is 27 percent. What did Sammy's Shovels report as net income (or, net profit) in 2010

Answer 1

Answer: $25731.77

Step-by-step explanation:

The attached picture explains the way to solve the question. It would be noted that the expenses like the operating, depreciation, interest expense and the cost of good sold were all subtracted from the sales revenue.

Then the income before tax was $35249. Then the tax expense of 27% was deducted.

Income Tax expense = 27% of $35249 = $9517.23

Net profit = $35249 - $9517.23 = $25731.77

The net profit for Sammy Shovels is $25731.77.