G+ Company is a division of GHI Company. This data pertains to G+ division. Sales amounted to $800,000. Cost of sales is 60% of sales. Other direct expenses of the division amount to 15% of sales. Allocated expenses are $90,000. Interest amounts to 10% of long-term debt. Taxes are 30% of income. Total assets are $500,000 with 10% representing short-term and 40% representing long-term debt.
How much is the division's net income?© BrainMass Inc. brainmass.com June 3, 2020, 9:17 pm ad1c9bdddf
Gross profit = Sales * (1 - share of cost - share of direct expenses) - allocated ...
This solution determines the net income of the division by calculating the gross profit and earnings before tax. All steps are shown with full formulas.