Ajax enterprises, Inc has the following income statement items: sales of $48,250,000; operating expenses of $10,225,000; cost of goods sold of $32,025,000; and interest expense of $650,000
If the firm's income tax rate is 34%, what is the amount of the firm's income tax liability?
A) $1,665,000
B) $2,040,000
C) $1,819,000
D) $1,385,000
C
Explanation: C) Tax liability = EBT * Tax rate = (Sales - COGS - Operating Expenses - Interest Expense)*Tax rate = ($48,250,000 - $32,025,000 - $10,225,000 - $650,000 ) * .34 = $1,819,000.
You might also like to view...
Green retailing yields both top- and bottom-line benefits
Indicate whether the statement is true or false
Which of the following does NOT help explain why income tax expense is different from the product of pretax income times the current tax rate?
a. Permanent differences b. Temporary differences c. The fact that future and current tax rates are different d. A change in the valuation allowance account for the deferred tax asset.
Reflecting responses should not ______.
a. paraphrase the message b. communicate understanding c. use the sender’s exact words d. communicate acceptance
Which stage in a customer relationship management cycle is characterized by the sharing of customer information to all areas of a business after it has been analyzed and transformed into useful information?
a. Identifying profitable and unprofitable customers b. Leveraging customer information c. Identifying customer relationships with the organization d. Storing and integrating customer data