QUESTION 19
Henderson Corporation includes in its results for the year ended December 31, 2019 the following items:
Gain on Sale of Investments |
$20,000 |
Cash |
1,600,000 |
Interest Expense |
15,000 |
Cost of Goods Sold |
4,500,000 |
Selling Expenses |
500,000 |
Restructuring Costs |
344,000 |
Accounts Payable |
40,000 |
Sales |
7,600,000 |
Administrative Expenses |
96,000 |
Sales Returns |
200,000 |
Additional Information:
1) Henderson’s effective tax rate is 30%.
2) Henderson sells the assets of a particular division on December 15, 2019 at a price of $500,000. The net book value of the division’s assets at the time of sale is $800,000. The division has before-tax operating income from operations of $75,000 from the beginning of the year through December 15, 2019.
What is net income?
A. |
$1,964,000. |
|
B. |
$2,265,000. |
|
C. |
$1,218,000. |
|
D. |
$1,375,000. |
The Net income is C. 1218000
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