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Given the following data from Swamp & Sand Industries, calculate the NI. The tax rate is 30%. ...

Question:

Given the following data from Swamp & Sand Industries, calculate the NI. The tax rate is 30%.

Sales 1150
Cost of Sales 400
SGA 315
Depreciation 98
Interest Expense 7
NWC 26
CapEx 144
Dividends 30

Note SGA does not include depreciation.

Income Statement

Income Statements can be done via a single-step income statement, that expenses will be deducted from the revenues. A multi-step income statement is done via several steps, from computing the gross margin and detailed breakdown of the expenses up to computation of income taxes to get the net income for the period.

Answer and Explanation:

We will compute for the net income using the single-step income statement. Net Income is the highlighted amount at the bottom.

Sales 1,150
Cost of Sales (400)
Gross Margin 750
SGA (315)
Depreciation (98)
Interest (7)
Operating Margin 330
Taxes (Operating Margin * 30%) (99)
Net Income 231

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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