Problem 2: 30 points. Shallow Inc. has sales of $1,500,000, costs of $975,000, depreciation expense of $142,000, interest expense of $56,000, and a tax rate of 21 percent. a. Prepare the Income Statement for the firm b. What is the net income for the firm? B #2 Basic Problem 1 Income Statement Problem 2 3 Sales 4 Cost of Goods Sold 5 Depreciation 6 Interest Expense 7 Tax Rates 8 9 What is the Net Income for the Company? 10 11 Sales 12 less: COGS Earning before Interest, Taxes, Depreciation & 13 Amortization (EBITDA) 14 less: Depreciation 15 Earning before Interest and Taxes (EBIT) 16 less: Interest Expense 17 Earnings before Taxes 18 less: Taxes (tax rate x Earnings before taxes) 19 Net Income 20 21 o 22 23 24 25 26 27 28 29 30 31 32 33 34 35