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Kamili Company reported the following income statement items for 20X1: Sales: $100,000 Net Income (after income tax): $17,000 Operating Income: $62,000 Gross Profit: $81,000 Additional data available to the management of Kamili Company indicate that Cost of Goods Sold included $4,560 in fixed costs (plus some amount of variable cost). In addition, Selling and Administrative Expense includes $13,300 in fixed costs (plus some amount of variable cost). Kamili's income tax rate is 40%. Assume that the sales amount were to grow to $119,000. Also assume that this sales increase can be accomplished with no increase in total assets and then no change in total financing. What is Net Income (after income tax) under the assumption of Sales Revenue of $119.000. Hint: In order to answer this question, you need to calculate what Interest Expense and Income Tax Expense are when sales are $100,000. If the Sales Revenue amount changes to $119,000, then Income Tax Expense will probably change (as income before income taxes changes), but interest expense will NOT change (because total financing remains the same). O $24,506.73 O $26,104.04 O $32,173.40 $43,506.73

Kamili Company reported the following income statement items for 20X1: Sales: $100,000 Net Income (after income tax): $17,000 Operating Income: $62,000 Gross Profit: $81,000 Additional data available to the management of Kamili Company indicate that Cost of Goods Sold included $4,560 in fixed costs (plus some amount of variable cost). In addition, Selling and Administrative Expense includes $13,300 in fixed costs (plus some amount of variable cost). Kamili's income tax rate is 40%. Assume that the sales amount were to grow to $119,000. Also assume that this sales increase can be accomplished with no increase in total assets and then no change in total financing. What is Net Income (after income tax) under the assumption of Sales Revenue of $119.000. Hint: In order to answer this question, you need to calculate what Interest Expense and Income Tax Expense are when sales are $100,000. If the Sales Revenue amount changes to $119,000, then Income Tax Expense will probably change (as income before income taxes changes), but interest expense will NOT change (because total financing remains the same). O $24,506.73 O $26,104.04 O $32,173.40 $43,506.73

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Kamili Company reported the following income statement items for 20X1: Sales: $100,000 Net Income (after income tax): $17,000 Operating Income: $62,000 Gross Profit: $81,000 Additional data available to the management of Kamili Company indicate that Cost of Goods Sold included $4,560 in fixed costs (plus some amount of variable cost). In addition, Selling and Administrative Expense includes $13,300 in fixed costs (plus some amount of variable cost). Kamili's income tax rate is 40%. Assume that the sales amount were to grow to $119,000. Also assume that this sales increase can be accomplished with no increase in total assets and then no change in total financing. What is Net Income (after income tax) under the assumption of Sales Revenue of $119.000. Hint: In order to answer this question, you need to calculate what Interest Expense and Income Tax Expense are when sales are $100,000. If the Sales Revenue amount changes to $119.000, then Income Tax Expense will probably change (as income before income taxes changes), but interest expense will NOT change (because total financing remains the same). O $24,506.73 O $26,104.04 O $32,173.40 O $43,506.73
Transcribed Image Text:Kamili Company reported the following income statement items for 20X1: Sales: $100,000 Net Income (after income tax): $17,000 Operating Income: $62,000 Gross Profit: $81,000 Additional data available to the management of Kamili Company indicate that Cost of Goods Sold included $4,560 in fixed costs (plus some amount of variable cost). In addition, Selling and Administrative Expense includes $13,300 in fixed costs (plus some amount of variable cost). Kamili's income tax rate is 40%. Assume that the sales amount were to grow to $119,000. Also assume that this sales increase can be accomplished with no increase in total assets and then no change in total financing. What is Net Income (after income tax) under the assumption of Sales Revenue of $119.000. Hint: In order to answer this question, you need to calculate what Interest Expense and Income Tax Expense are when sales are $100,000. If the Sales Revenue amount changes to $119.000, then Income Tax Expense will probably change (as income before income taxes changes), but interest expense will NOT change (because total financing remains the same). O $24,506.73 O $26,104.04 O $32,173.40 O $43,506.73
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