Emily Lim owns and runs an ice cream parlor in San Diego. Last year, she had sales of $530,000 and an average tax rate of 33%. She spent $53,000 on ingredients, $26,500 on utilities, and $95,400 to rent the premises. Emily has a few employees and paid them $106,000 in wages in total. She also paid herself a salary of $79,500 and spent $53,000 to pay for employee benefits. A few years ago, Emily borrowed money to buy the ice making equipment. Last year, she paid $26,500 in interest on that loan. Depreciation for the equipment was $15,900. What was operating income (EBIT) for the year? What was net income for the year?
Emily Lim owns and runs an ice cream parlor in San Diego. Last year, she had sales of $530,000 and an average tax rate of 33%. She spent $53,000 on ingredients, $26,500 on utilities, and $95,400 to rent the premises. Emily has a few employees and paid them $106,000 in wages in total. She also paid herself a salary of $79,500 and spent $53,000 to pay for employee benefits. A few years ago, Emily borrowed money to buy the ice making equipment. Last year, she paid $26,500 in interest on that loan. Depreciation for the equipment was $15,900. What was operating income (EBIT) for the year? What was net income for the year?
Chapter2: Gross Income And Exclusions
Section: Chapter Questions
Problem 3P
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Emily Lim owns and runs an ice cream parlor in San Diego. Last year, she had sales of $530,000 and an average tax rate of 33%. She spent $53,000 on ingredients, $26,500 on utilities, and $95,400 to rent the premises.
Emily has a few employees and paid them $106,000 in wages in total. She also paid herself a salary of $79,500 and spent $53,000 to pay for employee benefits.
A few years ago, Emily borrowed money to buy the ice making equipment. Last year, she paid $26,500 in interest on that loan.
What was operating income (EBIT) for the year?
What was net income for the year?
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