Misty Company reported the following before-tax items during the current year: Sales - $600 Operating expenses - $250 Restructuring charges - $20 Extraordinary loss - $50 Misty's effective tax rate is 40%, and there were 1,000 shares of common stock outstanding

Business May 23, 2021

Misty Company reported the following before-tax items during the current year: Sales - $600 Operating expenses - $250 Restructuring charges - $20 Extraordinary loss - $50 Misty's effective tax rate is 40%, and there were 1,000 shares of common stock outstanding. What would be Misty's net income for the current year?

Expert Solution

Answer:

sales	600
less:Operating expense	- 250

operating Income (A)	350
other income /loss
Restructuring charges (b)	- 20
Extraordinary loss (C)	- 50
Income before Tax (A+B+C)	280
less:Taxes [280*.40]	- 112

net Income [280-112]	168

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