In 2014, Timmers, Inc. (a retail clothing company) sold 102,300 units of its product at an average price of

Question

$100.00 per unit. The company reported estimated returns and allowances in 2014 of 1.5 percent of gross
revenue. Timmers actually purchased 109,500 units of its product from its manufacturer in 2014 at an average
cost of $75.00 per unit. Timmers began 2014 with 8,000 units of its product in inventory (carried at an average
cost of $75.00 per unit). Operating expenses (excluding depreciation) for Timmers, Inc. in 2014 were
$750,000 and depreciation expense was $250,000. Timmers had $3,000,000 in debt outstanding throughout
all of 2014. This debt carried an average interest rate of 7.0 percent. Finally, Timmers’ tax rate was 30 percent.
Timmers’ fiscal year runs from January 1 through December 31. Given this information, compute net income
for Timmers for 2014.