The Ivanhoe Company has disclosed the following financial information in its annual reports for the period ending March 31, 2017: sales of $1.70 million, cost of goods sold of $813,400, depreciation expenses of $175,000, and interest expenses of $89,575. Assume that the firm has an average tax rate of 35 percent. What is the company’s net income? Set up an income statement to answer the question. (Round answers to 2 decimal places, e. g. 15.25)

The company’s net income is $404,316.

Explanation:

                 Ivanhoe Company

Income statement for the period ended March 31, 2017

                                                                     $

Sales                                                     1,700,000      

Cost of goods sold                               (813,400)  

Gross Income                                        886,600        

Depreciation expense                          (175,000)          

Operating Income                                   711,600        

Interest expense                                    (89,575)      

Income before Tax                                622,025        

Tax rate 35%                                         (217,709)

Net Income                                             404,316    

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