The owner of a bicycle repair shop forecasts revenues of $160,000 a year. Variab
ID: 2709791 • Letter: T
Question
The owner of a bicycle repair shop forecasts revenues of $160,000 a year. Variable costs will be $50,000, and rental costs for the shop are $30,000 a year. Depreciation on the repair tools will be $10,000. Prepare an income statement for the shop based on these estimates. The tax rate is 35%. (Input all amounts as positive values.)
The owner of a bicycle repair shop forecasts revenues of $160,000 a year. Variable costs will be $50,000, and rental costs for the shop are $30,000 a year. Depreciation on the repair tools will be $10,000. Prepare an income statement for the shop based on these estimates. The tax rate is 35%. (Input all amounts as positive values.)
Explanation / Answer
INCOME STATEMENT Sales revenue $160,000 Less: Variable costs $ 50,000 Shop rental costs $ 30,000 Depreciation $ 10,000 Profit before tax $ 70,000 Less: Tax@35% $ 24,500 Net income $ 45,500
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