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Calculate the net income after corporate income tax is paid for Quarter 1 from the following income statement. Use a corporate income tax rate of 21%. Q1 (x1000) Q2(x1000) Net Sales 115 125 COGS (30) (31) Gross Profit 85 94 Overhead (32) (41) Pre-tax Income 53 53 Net Income = $[?] Multiply your result by 1000 before entering. For example: 1.23 (x1000) = $1,230. %3D Enter

Calculate the net income after corporate income tax is paid for Quarter 1 from the following income statement. Use a corporate income tax rate of 21%. Q1 (x1000) Q2(x1000) Net Sales 115 125 COGS (30) (31) Gross Profit 85 94 Overhead (32) (41) Pre-tax Income 53 53 Net Income = $[?] Multiply your result by 1000 before entering. For example: 1.23 (x1000) = $1,230. %3D Enter

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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**Calculate the net income after corporate income tax is paid for Quarter 1 from the following income statement. Use a corporate income tax rate of 21%.** | | Q1 (x1000) | Q2 (x1000) | |---------------------|------------|------------| | Net Sales | 115 | 125 | | COGS | (30) | (31) | | Gross Profit | 85 | 94 | | Overhead | (32) | (41) | | Pre-tax Income | 53 | 53 | **Net Income = $ [?]** Multiply your result by 1000 before entering. For example: 1.23 (x1000) = $1,230. **Explanation:** - **Net Sales:** The total sales revenue. - **COGS (Cost of Goods Sold):** The direct costs attributable to the production of the goods sold. - **Gross Profit:** Net Sales minus COGS. - **Overhead:** Operating expenses excluding direct costs. - **Pre-tax Income:** Gross Profit minus Overhead. Calculate the net income by subtracting the corporate income tax from pre-tax income. The corporate income tax is calculated by multiplying the pre-tax income by the tax rate (21%). Note: Final result should be multiplied by 1000 as per the instructions.
Transcribed Image Text:**Calculate the net income after corporate income tax is paid for Quarter 1 from the following income statement. Use a corporate income tax rate of 21%.** | | Q1 (x1000) | Q2 (x1000) | |---------------------|------------|------------| | Net Sales | 115 | 125 | | COGS | (30) | (31) | | Gross Profit | 85 | 94 | | Overhead | (32) | (41) | | Pre-tax Income | 53 | 53 | **Net Income = $ [?]** Multiply your result by 1000 before entering. For example: 1.23 (x1000) = $1,230. **Explanation:** - **Net Sales:** The total sales revenue. - **COGS (Cost of Goods Sold):** The direct costs attributable to the production of the goods sold. - **Gross Profit:** Net Sales minus COGS. - **Overhead:** Operating expenses excluding direct costs. - **Pre-tax Income:** Gross Profit minus Overhead. Calculate the net income by subtracting the corporate income tax from pre-tax income. The corporate income tax is calculated by multiplying the pre-tax income by the tax rate (21%). Note: Final result should be multiplied by 1000 as per the instructions.
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**Understanding Corporate Income Taxes** *Calculate the net income after corporate income tax is paid for Quarter 1 from the following income statement. Use a corporate income tax rate of 21%.* ### Income Statement | | Q1 (x1000) | Q2 (x1000) | |----------------------|------------|------------| | **Net Sales** | 115 | 175 | | **COGS** | (33) | (35) | | **Gross Profit** | 82 | 140 | | **Overhead** | (32) | (51) | | **Pre-tax Income** | 50 | 89 | ### Instructions: 1. Calculate the **Net Income** by applying the 21% corporate income tax rate to the Pre-tax Income. 2. Multiply your result by 1000 before entering. **For example:** Net Income = 1.23 (x1000) = $1,230 ### Explanation of Key Terms: - **Net Sales**: The total revenue from sales after deducting returns, allowances for damaged or missing goods, and any discounts allowed. - **COGS (Cost of Goods Sold)**: The direct costs attributable to the production of the goods sold in a company. - **Gross Profit**: The difference between Net Sales and COGS. - **Overhead**: Ongoing business expenses not directly attributed to creating a product or service. - **Pre-tax Income**: The income that remains after subtracting all expenses, except for taxes. - **Net Income**: The actual profit after all expenses and taxes have been deducted. *To find Net Income for Q1:* 1. Calculate the tax: \( \text{Tax} = \text{Pre-tax Income} \times 0.21 \) 2. Subtract the tax from the Pre-tax Income. Let's calculate it: Tax for Q1 = \( 50 \times 0.21 = 10.5 \) Net Income for Q1 = \( 50 - 10.5 = 39.5 \) When multiplied by 1000, Net Income = $39,500
Transcribed Image Text:**Understanding Corporate Income Taxes** *Calculate the net income after corporate income tax is paid for Quarter 1 from the following income statement. Use a corporate income tax rate of 21%.* ### Income Statement | | Q1 (x1000) | Q2 (x1000) | |----------------------|------------|------------| | **Net Sales** | 115 | 175 | | **COGS** | (33) | (35) | | **Gross Profit** | 82 | 140 | | **Overhead** | (32) | (51) | | **Pre-tax Income** | 50 | 89 | ### Instructions: 1. Calculate the **Net Income** by applying the 21% corporate income tax rate to the Pre-tax Income. 2. Multiply your result by 1000 before entering. **For example:** Net Income = 1.23 (x1000) = $1,230 ### Explanation of Key Terms: - **Net Sales**: The total revenue from sales after deducting returns, allowances for damaged or missing goods, and any discounts allowed. - **COGS (Cost of Goods Sold)**: The direct costs attributable to the production of the goods sold in a company. - **Gross Profit**: The difference between Net Sales and COGS. - **Overhead**: Ongoing business expenses not directly attributed to creating a product or service. - **Pre-tax Income**: The income that remains after subtracting all expenses, except for taxes. - **Net Income**: The actual profit after all expenses and taxes have been deducted. *To find Net Income for Q1:* 1. Calculate the tax: \( \text{Tax} = \text{Pre-tax Income} \times 0.21 \) 2. Subtract the tax from the Pre-tax Income. Let's calculate it: Tax for Q1 = \( 50 \times 0.21 = 10.5 \) Net Income for Q1 = \( 50 - 10.5 = 39.5 \) When multiplied by 1000, Net Income = $39,500
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