Nimitz Rental Company provided the following information to its auditors. For the year ended...

Question:

Nimitz Rental Company provided the following information to its auditors. For the year ended March 31, 2014, the company has revenues of $880,700, general and administrative expenses of $368,600, depreciation expenses of $131,455, leasing expenses of $108,195, and interest expenses equal to $78,122. If the company's average tax rate is 34%, what is its net income after taxes? (Round intermediate calculations and final answer to the nearest whole dollar.)

Net Income:

Net Income refers to the total direct and indirect earnings of the company for a period after considering all the direct and indirect expenses related to the period. The expenses also include the interest and taxes.

Answer and Explanation:

The net income of the company is as follows:

Revenues = $880,700.00

Less: General expenses = $368,600.00

Less: Leasing Expenses = $108,195.00

Less: Depreciation = $131,455.00

Earnings before interest and taxes (EBIT) = $272,450.00

Less: Interest = $78,122.00

Earnings before tax (EBT) = $194,328.00

Less: Tax @ 34% = $66,071.52

Net Income = $128,256.48


Learn more about this topic:

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What Is Net Income? - Definition & Formula

from OSAT Business Education (CEOE) (040): Practice & Study Guide

Chapter 69 / Lesson 5
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