A bookstore is incorporated at the beginning of the year, so all entries of balance sheet are
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Question:
A bookstore is incorporated at the beginning of the year, so all entries of balance sheet are zero at the beginning of the year (Jan. 1).
David invests $5,000 at the beginning of the year and withdraws $5,000 at the end of the year.
The bookstore buys books worth $5,000.
The bookstore sells all of the books for $15,000 (cash) during the year.
The bookstore incurs operating expense of $3,000 to pay utilities.
At the beginning of the year, the bookstore borrows $5,000 whose interest rate is 40% at the beginning of the year. The bookstore pays interest and principal at the end of the year.
The tax rate is 20%.
Question: What is the net income during the year?
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