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Banana Box Corporation has sales of $4,915,390, income tax of $344,367, the selling, general and...

Question:

Banana Box Corporation has sales of $4,915,390, income tax of $344,367, the selling, general and administrative expense of $248,106, depreciation of $320,544, cost of goods sold of $2,574,420 and interest expense of $199,573. Calculate the amount of the firm's income before taxes?

Earnings Before Taxes:

The earnings before taxes also referred to as the taxable income is the amount to which the tax is applied and reduced from, to derive the net income. The earnings before taxes represent the income remaining after meeting all the operating, noncash and nonoperating expenses from the gross profit. Gross profit is the difference between the sales revenue and the cost of goods sold.

Answer and Explanation:


Answer:

Banana Box Corp's income before taxes is $1,572,747.

Explanation:

We need to prepare the income statement for Banana Box Corp. to determine the income before taxes, (EBT).

Amount
Sales $4,915,390
Cost of goods sold $2,574,420
Gross profit $2,340,970
Selling, general and administrative expenses $248,106
Depreciation expense $320,544
EBIT $1,772,320
Interest expense $199,573
EBT $1,572,747

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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