Centennial Brewery produced revenues of $1,145,227 in 2008. It has expenses (excluding depreciation) of $812,640, depreciation of $131,335, and interest expense of $81,112. It pays an average tax rate of 34 percent. What is the firm's net income after taxes

The Net Income after tax = $79,293.00

Explanation:

Centennial Brewery produced revenues of $1,145,227 in 2008. It has expenses (excluding depreciation) of $812,640, depreciation of $131,335, and interest expense of $81,112. It pays an average tax rate of 34 percent. What is the firm's net income after taxes

SOLUTION

Centennial Brewery production in 2008

Revenues                                                      $1,145,227

Less:

Expenses                                                      $812,640.00                                                                  

Interest Expense                                              $81,112.00

Add : Depreciation                                         $131,335.00  

TOTAL EXPENSES                                         $1025087.00

∴ Revenues                                                     $1,145,227.00

Less Total Expenses                                        $1025087.00

                                                                           $120,140.00

Then charge 34% Tax $120,140.00

= 0.34 x $120,140.00 =$40,847.60

∴ Net Income after tax =   $120,140.00 - $40,847.60 =

∴Net Income after tax = $79,293.00

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