Compute net income for the first year for alpaca corporation

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Alpaca Corporation had revenues of $270,000 in its first year of operations. The company has not collected on $19,700 of its sales and still owes $25,900 on $85,000 of merchandise it purchased. The company had no inventory on hand at the end of the year. The company paid $13,500 in salaries. Owners invested $16,000 in the business and $16,000 was borrowed on a five-year note. The company paid $3,700 in interest that was the amount owed for the year, and paid $7,800 for a two-year insurance policy on the first day of business. Alpaca has an effective income tax rate of 40%.

Problem 1:
Compute net income for the first year for Alpaca Corporation.

Reference no: EM132794163

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