The Ranier Company reported the following items on its financial statements for
ID: 2541697 • Letter: T
Question
The Ranier Company reported the following items on its financial statements for the year ending December 31, 2012:
Sales
$ 560,000
Cost of goods sold
$400,000
Salary expense
40,000
Interest expense
30,000
Dividends
20,000
Income tax expense
25,000
The income statement for Ranier will report net income for the current year in the amount of
a. $45,000
b. $65,000
c. $85,000
d. $465,000
Sales
$ 560,000
Cost of goods sold
$400,000
Salary expense
40,000
Interest expense
30,000
Dividends
20,000
Income tax expense
25,000
Explanation / Answer
net income for the current year=(Sale-COGS-Salary expense-Interest expense-Income tax expense)
which is equal to
=(560,000-400,000-40000-30000-25000)
which is equal to
=$65000.
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