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ri Fecta , a partnership , had revenues of $ 200,000 in its first year of operations. The partnership has not collected on $20,000 of its sales and still owes $ 25,000 on $70,000 of merchandise it purchased. There were no inventory on hand at the end of the year .The partnership paid $25,000 in salaries. The partners invested $ 40,000 in business and $ 20,000 was borrowed on a five-year note.The partnership paid $2000 in interest that was the amount owed for the year and paid $ 8,000 for two year insurance policy on the first day of business. Tri Fecta has an effective income tax rate of 40%. Compute net income for the first year for Tri Fecta.

ri Fecta , a partnership , had revenues of $ 200,000 in its first year of operations. The partnership has not collected on $20,000 of its sales and still owes $ 25,000 on $70,000 of merchandise it purchased. There were no inventory on hand at the end of the year .The partnership paid $25,000 in salaries. The partners invested $ 40,000 in business and $ 20,000 was borrowed on a five-year note.The partnership paid $2000 in interest that was the amount owed for the year and paid $ 8,000 for two year insurance policy on the first day of business. Tri Fecta has an effective income tax rate of 40%. Compute net income for the first year for Tri Fecta.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Tri Fecta , a partnership , had revenues of $ 200,000 in its first year of operations. The partnership has not collected on $20,000 of its sales and still owes $ 25,000 on $70,000 of merchandise it purchased. There were no inventory on hand at the end of the year .The partnership paid $25,000 in salaries. The partners invested $ 40,000 in business and $ 20,000 was borrowed on a five-year note.The partnership paid $2000 in interest that was the amount owed for the year and paid $ 8,000 for two year insurance policy on the first day of business. Tri Fecta has an effective income tax rate of 40%.

Compute net income for the first year for Tri Fecta.

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