Income and Cash Flow Analysis The Berndt Corporation expects to have sales of $1
ID: 2813315 • Letter: I
Question
Income and Cash Flow Analysis The Berndt Corporation expects to have sales of $15 million. Costs other than depreciation are expected to be 80% of sales, and depreciation is expected to be $1.5 million. All sales revenues will be collected in cash, and costs other than depreciation must be paid for during the year. Brendt's federal-plus-state tax rate is 35%, Berndt has no debt. a. Set up an income statement. What is Berndt's expected net income? Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000.Explanation / Answer
Net income is $975,000
Particulars Amount Sales 15,000,000 Expenses: Other than depreciation 12,000,000 Depreciation 1,500,000 Total costs 13,500,000 Profit before tax 1,500,000 Tax at 35% 525,000 Net profit 975,000