Compute net income for the first year for alpaca corporation

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Reference no: EM133346208

Question: Alpaca Corporation had revenues of $240,000 in its first year of operations. The company has not collected on $18,300 of its sales and still owes $26,000 on $95,000 of merchandise it purchased. The company had no inventory on hand at the end of the year. The company paid $11,000 in salaries. Owners invested $13,000 in the business and $13,000 was borrowed on a five-year note. The company paid $3,500 in interest that was the amount owed for the year, and paid $5,400 for a two-year insurance policy on the first day of business. Alpaca has an effective income tax rate of 40%.

Compute net income for the first year for Alpaca Corporation.

Reference no: EM133346208

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