Respuesta :
Answer:
The net income of this firm is $179,900.
Explanation:
Net income of firm refers to sales of the firm minus cost of goods, operating expenses, selling and administrative expenses, depreciation, interest expense, taxes, and among others.
Net income is also referred to as net earnings and investors usually employ it as a metric to determine the amount by which a firm's revenue is greater than its expenses.
For this question, net income can be determined by preparing the firm's income statement as follows:
Lifeline, Inc.
Income Statement
For the Year ...
Particular Amount ($)
Sales 603,000
Cost of sales (255,000)
Gross profit 348,000
Depreciation expense (62,000)
Interest expense (29,000)
Income bore tax 257,000
Tax (30% * 257,000) (77,100)
Net income 179,900
Dividends (45,000)
Retained earnings 134,900
From the income statement above, the net income of this firm is $179,900.
