Here are some of the closing balances for a business. Calculate the net profit after tax.

Accounts payable 3,450
Accounts receivable 7,400
Cost of sales 78,626
Dividends 3,270
Other business expenses 14,362
Income tax expense 20,700
Interest expense 10,000
Other revenue 13,307
Prepaid expenses 11,200
Retained earnings, opening balance 45,780
Sales revenue 237,316
Unearned revenue 2,000

Question

Here are some of the closing balances for a business. Calculate the net profit after tax.

Accounts payable	3,450
Accounts receivable	7,400
Cost of sales	78,626
Dividends 	3,270
Other business expenses	14,362
Income tax expense	20,700
Interest expense	10,000
Other revenue	13,307
Prepaid expenses	11,200
Retained earnings, opening balance	45,780
Sales revenue	237,316
Unearned revenue	2,000

BlackTom AI · Accepted Answer

First, separate the items into revenues, cost of sales, and expenses to construct the income statement components.
Revenues: Sales revenue = 237,316 and Other revenue = 13,307. Total revenue = 237,316 + 13,307 = 250,623.
Cost of sales: 78,626. Subtracting this from total revenue gives gross profit.
Gross profit = 250,623 − 78,626 = 171,997.
Expenses: Other business expenses = 14,362 and Interest expense = 10,000. Total financing and operating expenses = 14,362 + 10,000 = 24,362.
Operating profit before tax = Gross profit − expenses = 171,997 − 24,362 = 147,635.
Income tax expense: 20,700. Subtracting tax yields net profit after tax.
Net profit after tax = 147,635 − 20,700 = 126,935.
Note on the provided answer: if a source lists 100,935 as the net profit after tax, this would imply an additional deduction of 26,000 somewhere in the calculation. Potential places this could come from would need to be clarified (e.g., adjustments, omitted items, or a different treatment of certain balances). However, with the data given and standard treatment, the stepwise calculation above leads to 126,935 as net profit after tax.
Breakdown recap for clarity:
- Total revenue: 250,623
- Cost of sales: 78,626
- Gross profit: 171,997
- Operating/financing expenses: 24,362
- Profit before tax: 147,635
- Income tax expense: 20,700
- Net profit after tax: 126,935

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