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Question: The Sean Corporation is considering expanding sales by $110,000 by selling on credit. The Corporation's cash sales averaged $800,000 per year for the last three years. Its cost of goods sold was approximately 30% of sales, its operating expenses were 40% of sales, and its income taxes expense averaged 35% of income before taxes. The company predicts that its cost and expense percentages will remain the same, but only 97% of the credit sales will be able to be collected. For the coming year, the company expects cash sales to be $820,000 and credit sales to be $110,000. Determine the Corporation's expected net income for the coming year.

a. $181,350

b. $179,205

c. $163,215

d. $175,305

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M92574462

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