Sales (all on credit)

$500,000

Cost of Goods Sold

380,000

Gross Profit

120,000

Operating Expenses

Selling Expenses

35,000

Administrative Expenses

45,000

Total Operating Expenses

80,000

Operating Income

40,000

Interest Expense

12,000

Income before Taxes

28,000

Income Tax Expense

5,000

Net Income after Taxes

$ 23,000