Question

All of the accounts of the Grass is Greener Company have been adjusted as of December 31, 2016, with the exception of income taxes incurred but not yet recorded. Those account balances appear below. All have normal balances. The estimated income tax rate for the company is 30%. Cash $ 360,340 Accounts Receivable 771,950 Interest Receivable 4,750 Prepaid Insurance 7,250 Prepaid Rent 12,100 Supplies 221,400 Equipment 681,500 Accumulated Depreciation––Equipment 136,100 Accounts Payable 290,700 Unearned Revenue 88,100 Income Tax Payable 0 Salaries and Wages Payable 26,100 Notes Payable (long-term) 365,040 Long–Term Debt 238,600 Common Stock 391,400 Retained Earnings 214,600 Dividends 21,800 Service Revenue 931,000 Interest Revenue 123,100 Supplies Expense 345,200 Repairs and Maintenance Expense 255,100 Depreciation Expense 59,550 Rent Expense 31,400 Income Tax Expense Unknown

A.Calculate the income before income tax.

B. Calculate the income tax expense.

c.	Calculate the net income.

Answer 1

A
Service Revenue	931000
Interest Revenue	123100
Total Revenues		1054100
Less: Expenses
Supplies Expense	345200
Repairs and Maintenance Expense	255100
Depreciation Expense	59550
Rent Expense	31400
Total Expenses		691250
Income before income tax		362850
B
Income before income tax	362850
X Income tax rate	30%
Income tax expense	108855
C
Income before income tax	362850
Less:Income tax expense	108855
Net income	253995