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Income Statement Bullseye, Inc.'s 2018 income statement lists the following income and expenses: EBIT = $901,500, Interest expense = $90,000, and Net income = $571,500. What is the 2008 Taxes reported on the income statement? Multiple Choice$811,500$330,000There is not enough information to calculate 2018 Taxes.$240,000

Question

 

Income Statement Bullseye, Inc.'s 2018 income statement lists the following income and expenses: EBIT = $901,500, Interest expense = $90,000, and Net income = $571,500. What is the 2008 Taxes reported on the income statement?

 

Multiple Choice

  1. $811,500

  2. $330,000

  3. There is not enough information to calculate 2018 Taxes.

  4. $240,000

check_circleAnswer
Step 1

Earnings (or net income) are determined after a firm pays off its interests and taxes from the earnings before interest and taxes (or EBIT). 

Step 2
EBIT-Interest expense-Tax=Net income
->901500-90000-Tax-571500
=>901500-90000-571500-Tax
=>Tax 240000
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EBIT-Interest expense-Tax=Net income ->901500-90000-Tax-571500 =>901500-90000-571500-Tax =>Tax 240000

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