Zigs Industries had the following operating results for 2015: sales = $25,152; cost of goods sold = $15,403; depreciation expense = $4,062; interest expense = $2,174; dividends paid = $1,849. At the beginning of the year, net fixed assets were $17,099, current assets were $5,695, and current liabilities were $3,092. At the end of the year, net fixed assets were $20,506, current assets were $7,607, and current liabilities were $3,151. The tax rate for 2015 was 34 percent. What is net income for 2015?
To calculate the net income for 2015, we need to subtract all the expenses from sales.
Operating expenses:
Cost of goods sold: $15,403
Depreciation expense: $4,062
Interest expense: $2,174
Dividends paid: $1,849
Total operating expenses = $15,403 + $4,062 + $2,174 + $1,849 = $23,488
Net income = Sales - Total operating expenses
Net income = $25,152 - $23,488 = $1,664
To find the net income for 2015, we need to calculate the operating income first.
Operating income = Sales - Cost of Goods Sold - Depreciation Expense - Interest Expense
Operating income = $25,152 - $15,403 - $4,062 - $2,174
Operating income = $3,513
Next, we need to calculate the taxes paid.
Taxes paid = Operating income * Tax rate
Taxes paid = $3,513 * 0.34
Taxes paid = $1,194.42
Now, we can find the net income.
Net income = Operating income - Taxes paid - Dividends paid
Net income = $3,513 - $1,194.42 - $1,849
Net income = $470.58
Therefore, the net income for 2015 is $470.58.