The Fitness Studio Incs 2015 income statement lists the foll

The Fitness Studio, Inc.’s, 2015 income statement lists the following income and expenses: EBIT = $548,000, interest expense = $96,000, and net income = $427,000.

Calculate the 2015 taxes reported on the income statement.

The Fitness Studio, Inc.’s, 2015 income statement lists the following income and expenses: EBIT = $548,000, interest expense = $96,000, and net income = $427,000.

Calculate the 2015 taxes reported on the income statement.

Solution

Calculation of tax: Particulars Amount EBIT 548000 Less: Interest expense 96000 Earning before tax (548000-96000) 452000 Less: Net income 427000 Tax (452000-427000) 25000 So taxes reported on income statement are $25000