(related to checkpoint 3.1) (working with the income statement) gmt transport company ended the year with…

(related to checkpoint 3.1) (working with the income statement) gmt transport company ended the year with record sales of $18,000,000. the firms cost of goods sold totaled $10,800,000, while its operating expenses (including depreciation) totaled $4,000,000. gmt paid $1,500,000 in interest expense and had an income tax liability of $595,000. what is the firms net income for the year?\n\ncomplete the income statement for gmt transport company. (round your answers to the nearest dollar.)\n\nrevenues\nless: cost of goods sold\nequals: gross profit\nless: operating expenses\nequals: net operating income\nless: interest expense\nequals: earnings before taxes\nless: income taxes\nequals: net income

(related to checkpoint 3.1) (working with the income statement) gmt transport company ended the year with record sales of $18,000,000. the firms cost of goods sold totaled $10,800,000, while its operating expenses (including depreciation) totaled $4,000,000. gmt paid $1,500,000 in interest expense and had an income tax liability of $595,000. what is the firms net income for the year?\n\ncomplete the income statement for gmt transport company. (round your answers to the nearest dollar.)\n\nrevenues\nless: cost of goods sold\nequals: gross profit\nless: operating expenses\nequals: net operating income\nless: interest expense\nequals: earnings before taxes\nless: income taxes\nequals: net income

Answer

Explanation:

Step1: Calculate gross profit

Gross profit = Revenues - Cost of goods sold Gross profit = $18000000 - 10800000=7200000$

Step2: Calculate net operating income

Net operating income = Gross profit - Operating expenses Net operating income = $7200000 - 4000000 = 3200000$

Step3: Calculate earnings before taxes

Earnings before taxes = Net operating income - Interest expense Earnings before taxes = $3200000 - 1500000=1700000$

Step4: Calculate net income

Net income = Earnings before taxes - Income taxes Net income = $1700000 - 595000 = 1105000$

Answer:

Revenues: $18000000$ Less: Cost of goods sold: $10800000$ Equals: Gross profit: $7200000$ Less: Operating Expenses: $4000000$ Equals: Net operating income: $3200000$ Less: Interest expense: $1500000$ Equals: Earnings before taxes: $1700000$ Less: Income taxes: $595000$ Equals: Net income: $1105000$