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Brown Office Supplies recently reported $15,500 of sales, $8,250 of operating costs other than depreciation, and $1,750 of depreciation. It had $9,000 of bonds outstanding that carry a 7.0% interest rate, and its federal-plus-state income tax rate was 25%. How much was the firm's earnings before taxes (EBT)?

Respuesta :

hyderali230

Answer:

The firm's earnings before taxes (EBT) was $4,870

Explanation:

                              Brown Office Supplies

                     Income statement for the year xxxx

                                                                     $

Sales                                                         15,500

Operating Cost                                        (8,250)      

Depreciation expense                             (1,750)

Operating Earning                                    5,500      

Interest expense ( 9000 x 7% )               (630)                                            

Earning before Tax                                   4,870    

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