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Question
All of the accounts of the Grass is Greener Company have been adjusted as of December 31, 2016, with the exception of income taxes incurred but not yet recorded. Those account balances appear below. All have normal balances. The estimated income tax rate for the company is 40%.
| Cash | $351,340 |
| Accounts Receivable | 753,950 |
| Interest Receivable | 4,300 |
| Prepaid Insurance | 6,800 |
| Prepaid Rent | 11,200 |
| Supplies | 216,900 |
| Equipment | 672,500 |
| Accumulated DepreciationEquipment | 128,900 |
| Accounts Payable | 281,700 |
| Unearned Revenue | 83,600 |
| Income Tax Payable | 0 |
| Salaries and Wages Payable | 23,400 |
| Notes Payable (long-term) | 356,040 |
| LongTerm Debt | 229,600 |
| Common Stock | 380,600 |
| Retained Earnings | 207,400 |
| Dividends | 20,000 |
| Service Revenue | 904,000 |
| Interest Revenue | 114,100 |
| Supplies Expense | 336,200 |
| Repairs and Maintenance Expense | 247,900 |
| Depreciation Expense | 57,750 |
| Rent Expense | 30,500 |
| Income Tax Expense | Unknown |
Required:
Part a. Calculate the income before income tax.
Part b. Calculate the income tax expense.
Part c. Calculate the net income.
Answer
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