A firms income statement included the following data the...

A firm's income statement included the following data. The firm's average tax rate was 25%. Cost of goods sold: $8,900 Income taxes paid: $2,900 Administrative expenses: $3,900 Interest expense: $1,900 Depreciation: $1,900 a. What was the firm's net income? Net income: $ b. What must have been the firm's revenues? Revenues: $ c. What was EBIT? EBIT: $

Transcript

00:01 In this video, we're going to compute for three requirements.

00:07 We have net income, the revenues, and the ebit, or your earnings before interest and taxes.

00:13 So for the first requirement, we are given an income tax rate of 25%.

00:20 And we're going to use that to compute for our net income.

00:28 So prior to arriving to your net income, we have an income before tax and then you deduct your taxes paid and you will arrive at your net income so this is how you generally compute for your net income now we are only given an income tax of 2 ,900 which is this is 25 % of your income of your income before tax.

01:15 So all you need to do to compute for your income before tax, just divide 2 ,900 by 25%, and you will arrive at your income before tax of 11 ,600.

01:32 So 11600, less 2 ,900, and you will arrive at your net income of 8 ,700.

01:44 This is now your net income.

01:47 So, so, for the second requirement we are tasked to solve for the revenues so generally when we compute our revenues this is how we so i am sorry this is how we arrive at our net income we have revenues less expenses equals your net income.

02:21 But in this case, our revenues is not given, but we are given expenses and we are given income.

02:30 So we are going to work back this problem by adding your expenses and income to arrive at your revenue.

02:41 So we're going to rearrange the formula.

02:46 We have total expenses.

02:50 And we add our net income.

02:59 So we will arrive at our revenue...