A firm has $90,000 in direct materials costs and $60,000 in direct labor costs, with another $30,000
A firm has $90,000 in direct materials costs and $60,000 in direct labor costs, with another $30,000 in overhead in 2022. It has equipment that was purchased for $900,000 and is being depreciated towards a salvage value of $100,000 over 5 years. The firm purchased land this year for $800,000 and paid a dividend of $120,000. Its selling, general and administrative costs are $110,000. It also borrowed $2 million at 8 percent interest and is in the 27 percent tax bracket.
If the firm’s net income is $60,000 for 2022,
(a) use any relevant information from the facts above to complete this firm’s income statement in 2022, solving algebraically for any missing items.
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