During the current fiscal year, a company had revenues of $400,000, cost of goods sold of $280,000, and an income tax r
Posted: Sat Aug 07, 2021 6:40 am
During the current fiscal year, a company had revenues of $400,000, cost of goods sold of
$280,000, and an income tax rate of 30 percent on income before income taxes. What was the
company's current year net income?
A) $120,000
B) $36,000
C) $84,000
D) $400,000
Answer: C
Explanation: ($400,000 − $280,000) = Income before income taxes, $120,000.
Income tax expense = 30% × $120,000 = $36,000.
Net income = $120,000 − $36,000 = $84,000.
$280,000, and an income tax rate of 30 percent on income before income taxes. What was the
company's current year net income?
A) $120,000
B) $36,000
C) $84,000
D) $400,000
Answer: C
Explanation: ($400,000 − $280,000) = Income before income taxes, $120,000.
Income tax expense = 30% × $120,000 = $36,000.
Net income = $120,000 − $36,000 = $84,000.