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Advantage First Corporation has sales of $4,279,560; income tax of $566,146; the selling, general...

Question:

Advantage First Corporation has sales of $4,279,560; income tax of $566,146; the selling, general and administrative expenses of $297,728; depreciation of $319,088; cost of goods sold of $2,749,920; and interest expense of $115,264. What is the amount of the firm's EBIT?

Income Statement

An income statement is a major financial statement that is prepared first before the balance sheet. The income statement shows the details on the firm's major sources of revenue and expenses streams that can help the users to analyze and improve on for better profitability.

Answer and Explanation:

We will compute for the earnings before interest and taxes. Interest expense of $115,264 is not included in the computation.

Sales 4,279,560
Cost of Goods Sold (2,749,920)
Gross Profit 1,529,640
Selling, General and Administrative Expenses (927,728)
Depreciation (319,088)
Earnings Before Interest and Taxes 282,824

Learn more about this topic:

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What Is an Income Statement? - Purpose, Components & Format

from Accounting 101: Financial Accounting

Chapter 2 / Lesson 2
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