Business, 06.09.2019 20:10, ferny5106

Frederickson office supplies recently reported $12,500 of sales, $7,250 of operating costs other than depreciation, and $1,250 of depreciation. the company had no amortization charges and no non-operating income. it had $8,000 of bonds outstanding that carry a 7.5% interest rate, and its federal-plus-state income tax rate was 40%. how much was the firm's taxable income, or earnings before taxes (ebt)?

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answered: crybaby222psyc

EBT 3,400

Explanation:

Earnings before Taxes (EBT)

sales revenue 12,500

operating cost (7,250)

EBDIT 5,250

(earnings before depreciation, interest and taxes)

Depreciation (1,250)

Interest

debt x cost of debt

8,000 x 7.5% = (600)

EBT 3,400

This will be the taxable income from which the income tax will be calculated.

answered: Josephcastillo6403

EBT = $3400

Explanation:

Income Statement

Sales Revenue 12,500

Operating costs ( 7,250 )

Operating profit (EBDIT) * 5,250

Depreciation Expense (1,250)

EBIT** 4,000

Finance cost (7.5%) (600)

EBT 3,400

*EBDIT-Earnings Before Depreciation,Interest and Tax

**EBIT-Earnings Before Interest and Tax

EBT represents earnings available from which distribution to tax authority can be made and dividends can also be paid-out to shareholders and the balance can then be retained for future business investment and expansion.

As a financial measure, it can be used to set target and measure performance of different divisional managers. This is possible because they have control over theit performance unlike when tax has been adjusted for which is not within their control. However, each divisional manager must be responsible for its financing decision before they can be held responsible for their performane on basis of EBT

answered: Guest

Two trends that i’ve noticed are the following: lifestyle trend of many people seeking fitnessgenerates a business opportunity of opening a gym. another trend is entertainment; popmusic is very popular which generates a business opportunity for record producers lookingto produce music that will sell

answered: Guest

The advantage of administering personality tests on employees is that it will allow the employer to know the mindset and personality of the employee. this will allow the employer to at least have an idea as to how the employee works and how his attitude in the workplace. the disadvantage is that it may make the employee a little anxious as to whether he would meet the personality requirements of the employer and whether he would be able to retain the job or not.

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Frederickson office supplies recently reported $12,500 of sales, $7,250 of operating costs other tha...