24
0.13
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The owner of a bicycle repair shop forecasts revenues of $160,000 a
year. Variable costs will be $50,000, and rental costs for the shop are
$30,000 a year. Depreciation on the repair tools will be $10,000.
a. Prepare an income statement for the shop based on these
estimates. The tax rate is 20%.
Answer is complete and correct.
INCOME STATEMENT
Revenue
$
160,000
Rental costs
30,000
Variable costs
50,000
Depreciation
10,000
Pretax profit
70,000
Taxes
14,000
Net income
$
56,000