A contractor's income statement shows gross profit of $450,000 and operating expenses of $320,000. If the tax rate is 25%, what is the net income after taxes?
Correct Answer
D) $97,500
Operating Income = $450,000 - $320,000 = $130,000. Taxes = $130,000 × 25% = $32,500. Net Income = $130,000 - $32,500 = $97,500
Why This Is the Correct Answer
Operating Income = $450,000 - $320,000 = $130,000. Taxes = $130,000 × 25% = $32,500. Net Income = $130,000 - $32,500 = $97,500
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