Censored Books, Inc., sold 1,400 finance textbooks for $160 each High Tuition University in 2007. These books cost $125 to produce. Censored Books spent $8,000(selling expense) to convince the university to but its books. Depreciation expense for the year was $12,000. In addition, Censored Books borrowed $90,000 on January 1, 2007, on which the company paid 10 percent interest. Both the interest and principal of the loan were paid on December 31, 2007. The publishing firm's tax rate is 30 percent. Did Censored Books make a profit in 2007? Please verify with an income statement in good form.

CaptainForest

I tried to keep it in good form, but I did add the calculations in as well.

Censored Books, Inc
Income Statement
For the Year Ending December 31, 2007

Sales 1,400 x 160 = 224,000
COGS 1,400 x 125 = 175,000
Gross Profit 49,000

Operating Expenses:
Selling Expenses 8,000
Depreciation Expense 12,000
Interest Expense 90,000 x 0.10 = 9,000
Total Operating Expenses 29,000

Income Before Taxes 49,000-29,000 = 20,000

Taxes 0.30 x 20,000 = 6,000

Net Income 20,000 – 6,000 = 14,000

Conclusion, yes they made a profit in 2007.