Round 201 Homework 1A Financial Statements Garden Pro Corpor ✓ Solved

Round 201homework 1a Financial Statementsgarden Pro Corporation Ha

Calculate the net income of Garden Pro Corporation using the provided financial data, including sales, income tax, expenses, depreciation, costs of goods sold, and interest expense.

Sample Paper For Above instruction

To determine the net income of Garden Pro Corporation, we must carefully analyze the provided financial figures and follow the standard calculations for net income. Net income reflects the company's profitability after deducting all operating expenses, interest, and taxes from total revenue. The core formula is:

Net Income = (Sales - Cost of Goods Sold - Operating Expenses - Depreciation - Interest Expense) - Income Tax

Given data includes sales of $4,057,990, costs of goods sold of $2,506,240, selling, general, and administrative expenses of $253,320, depreciation of $397,663, interest expense of $187,649, and income tax of $474,863. Plugging these values into the formula:

Revenue: $4,057,990

Less: Cost of Goods Sold: $2,506,240

Gross Profit: $1,551,750

Less: Operating Expenses (SG&A): $253,320

Less: Depreciation: $397,663

Breaking down further, Operating Income before Interest and Taxes:

Operating Income = $1,551,750 - $253,320 - $397,663 = $900,767

Next, subtract Interest Expense to get Earnings Before Taxes (EBT):

EBT = $900,767 - $187,649 = $713,118

Now, deduct income tax to find net income:

Net Income = $713,118 - $474,863 = $238,255

Therefore, the net income for Garden Pro Corporation is approximately $238,255.

However, note that since taxes are usually deducted after calculating taxable income, and given the data includes income tax separately, aligns with the standard approach in financial analysis.

In conclusion, after considering all operating expenses, depreciation, interest, and taxes, Garden Pro Corporation's net income is approximately $238,255, reflecting the company's profitability during the period.

References

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  • Weston, J. F., & Brigham, E. F. (2014). Managerial Finance (14th ed.). Thomson South-Western.
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