Question

On December 31, 2019, The Bates Company's revenue is $340,000 and expenses total $220,000 before consideration of the following: Accrued wages total $16,000; Accrued revenues total $46,000; Depreciation expense is $22,000; Rental revenue of $8,000 was earned; the rent from a tenant was initially recorded by Bates as unearned rent revenue; The income tax rate is 30% of income before income taxes. What is Bates' net income after consideration of the above information

Answer 1

Answer: $95,200

Step-by-step explanation:

Net Income before tax = Revenue - Expenses

Revenue = Revenue + Accrued revenues + Rental revenue

= 340,000 + 46,000 + 8,000

= $394,000‬

Expenses = Expenses + Accrued wages + Depreciation expenses

= 220,000 + 16,000 + 22,000

= $258,000

Net Income before taxes = 394,000 - 258,000

= $136,000

Net Income after tax = 136,000 ( 1 - Tax rate)

= 136,000 ( 1 - 0.3)

= $95,200