Please make the adequate changes Stein Books Inc. sold 2,200 finance textbooks f

Question

Please make the adequate changes

Stein Books Inc. sold 2,200 finance textbooks for $290 each to High Tuition University in 20X1. These books cost $250 to produce. Stein Books spent S12,400 (selling expense) to convince the university to buy its books Depreciation expense for the year was $15,400. In addition, Stein Books borrowed $102,000 on January 1, 20X1, on which the company paid 13 percent interest. Both the interest and principal of the loan were paid on December 31, 20X1. The publishing firm's tax rate is 30 percent. Prepare an income statement for Stein Books Stein Books Inc. Income Statement For the Year Ending December 31, 20x1 ost of goods sold Gross profit elling expense epreciation expense Operating profit nterest expense $ 390,000 345,000 45,000 12,400 15,500 17,100 11.110 5,990 1,797 4,193 Earnings before taxes axes Earnings after taxes

Explanation / Answer

Thus, $ 32,858 is the net profit.

Income Statment for Stein Books for the period ending 31.12.20X1 Line items Calculation Amounts (in $) Sales/Revenue (A) 2200*290 638,000 (-) Cost of production (B) 2200*250 (550,000) Gross Profit (C) (A) - (B) 88,000 (-) Selling expense (D) 12,400 (12,400) (-) Depreciation cost (E) 15,400 (15,400) Operating Profit (F) (C) - (D) - (E) 60,200 (-) Interest expense (G) 102,000*13% (13,260) Profit before tax (H) (F) - (G) 46,940 (-) Taxes (I) 30% of 46,940 (14,082) Net Profit (H) - (I) 32,858

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