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Calculate the net income after corporate income tax is paid for Quarter 1.

\begin{tabular}{|l|r|r|}
\hline \multicolumn{3}{|c|}{ Income Statement } \\
\hline & Q1 (x1000) & Q2 (x1000) \\
\hline Net Sales & 115 & 175 \\
\hline COGS & [tex]$(33)$[/tex] & [tex]$(34)$[/tex] \\
\hline Gross Profit & 82 & 141 \\
\hline Overhead & [tex]$(32)$[/tex] & [tex]$(49)$[/tex] \\
\hline Pre-tax Income & 50 & 92 \\
\hline
\end{tabular}

Corporate Income Tax for Q1 [tex]$= \$[/tex]10,500$

Net Income for Q1 [tex]$= \$[/tex][?]$



Answer :

GinnyAnswer
To calculate the net income after corporate income tax is paid for Quarter 1, follow these steps:

1. Identify Pre-tax Income for Q1:
The provided income statement indicates that the pre-tax income for Quarter 1 is \$50,000 (noting that values in the table are given in thousands).

2. Determine Corporate Income Tax:
The corporate income tax for Quarter 1 is specified as \$10,500.

3. Calculate Net Income:
The net income is found by subtracting the corporate income tax from the pre-tax income:
[tex]\[ \text{Net Income} = \text{Pre-tax Income} - \text{Corporate Income Tax} \][/tex]

Substitute the given values into the formula:
[tex]\[ \text{Net Income} = \[tex]$50,000 - \$[/tex]10,500
\][/tex]

4. Solve the Calculation:
[tex]\[ \text{Net Income} = \$39,500 \][/tex]

Hence, the net income after corporate income tax is paid for Quarter 1 is \$39,500.

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