Use the following information to calculate the company\'s accounting net income
ID: 2612280 • Letter: U
Question
Use the following information to calculate the company's accounting net income for the year.
Credit Sales $800,000
Cash Sales $500,000
Operating Expenses on Credit $200,000
Cash Operating Expenses $700,000
Accounts Receivable (Beg. of Year) $50,000
Accounts Receivable (End of Year) $80,000
Accounts Payable (Beg. of Year) $50,000
Accounts Payable (End of Year) $100,000
Corporate Tax Rate 40%
a. $120,000
b. $240,000 Correct
c. $125,000
d. $300,000
Please show step by step how to get to 240,000. Thanks
Explanation / Answer
Total sales = 800,000 +500,000 =$ 1,300,000
Total expense = 200,000 +700,00 = $ 900,000
Income before tax = 1,300,000 -900,000
. =$ 400,000
les:tax(40%) ( 160,000) [400000*.40]
net income =$ 240,000
correct optiin is "B" -$240,000