Bullseye, Inc.'s 2008 income statement lists the following income and expenses: EBIT = $901,000, Interest expense = $86,500, and Net income = $571,500. What is the 2008 Taxes reported on the income statement?

The answer is $243,000

Explanation:

Earnings Before Interest and Tax(EBIT) is $901,000

Interest expense is $86,500

Therefore, earnings before tax equals $901,000 - $86,500 = $814,500

Net income equals earnings before tax minus tax paid.

So lets rearrange;

Tax paid equals earnings before tax minus net income

Tax paid =$814,500 - $571,500

=$243,000.