Question

 The​ S&H Construction Company expects to have total sales next year totaling $ 15 comma 300...

 The​ S&H Construction Company expects to have total sales next year totaling $ 15 comma 300 comma 000. In​ addition, the firm pays taxes at 35 percent and will owe $ 311 comma 000 in interest expense. Based on last​ year's operations the​ firm's management predicts that its cost of goods sold will be 63 percent of sales and operating expenses will total 32 percent. What is your estimate of the​ firm's net income​ (after taxes) for the coming​ year?

Homework Answers

Answer #1

Sol:

S&H company income statement

Total sales $15,300,000
Less Cost of good sold (63% of sales) $9,639,000
Gross profit $5,661,000
Less Operating expenses (32%) $1,811,520
Operating profit $3,849,480
Less Interest $311,000
Earning before taxes $3,538,480
Less Tax expense (35%) $1,238,468
Net income $2,300,012

Therefore estimated net income​ (after taxes) of S&H Construction company for the coming​ year will be $2,300,012

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