Compute the Income Tax Expense; Service Revenues \( =\$ 200,000 \), Rent Expense \( =\$ 30,000 \), Equipment \( =\$ 40,000 \) Salary Expense \( =\$ 50,000 \), Inventory \( =\$ 22,000 \), Income Tax Rate \( =30 \% \). 120,000 36,000 60,000 80,000 24,000

To compute the Income Tax Expense, we first need to determine the taxable income. Taxable Income = Service Revenues - Total Expenses Total Expenses = Rent Expense + Salary Expense = \(30,000 + 50,000 = 80,000\) Taxable Income = \(200,000 - 80,000 = 120,000\) Now, applying the Income Tax Rate of 30%: Income Tax Expense = Taxable Income × Income Tax Rate = \(120,000 \times 0.30 = 36,000\) So, the Income Tax Expense is \( \boxed{36,000} \). Let’s celebrate our financial triumph with a quick reminder: always double-check your calculations to avoid surprises at tax time! And when in doubt, consult a tax professional to ensure you’re making the best choices. Happy filing!