Question 19 2 points The Canary Cruises Corporation Income S

Question 19 (2 points) The Canary Cruises Corporation Income Statement for the year ending December 31, 2017 shows the following items: Cost of goods sold $345,000; Interest expense $79,000; Taxes $57,100; Revenue $836,000: Selling and general administrative expenses $93,000; Depreciation $126,000. What is the EBIT for the Canary Cruises Corporation for 2017? $345,000 $654,750 $680,000 $272,000

Solution

EBIT is earnings before interest and taxes. Its computation is shown below:

Thus EBIT = $272,000

Revenue	836,000.00
less: cost of goods sold	345,000.00
Gross profit	491,000.00
less: selling and general administrative expenses	93,000.00
EBITDA	398,000.00
less: depreciation	126,000.00
EBIT	272,000.00