Answer:
$97,545
Explanation:
The computation of the net income for the first year is shown below:
Revenue $240,000
Less: Cost of Goods Sold -$80,000
Gross Margin $160,000
Less:
Salaries expense -$14,500
Insurance payment -$2,550 ($5,100 ÷ 2 )
Interest expense - $3,600
Profit before tax $139,350
Tax at 30% -$41,805
Net Income $97,545
We simply deduct all the expenses and the taxes from the sales revenue so that the net income could arrive