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# Problem 3-1 Income statement little books Inc. recently reported \$3million of net income. Its EBIT was \$6 million, and its tax was 40 percent. What

Problem 3-1
Income statement little books Inc. recently reported \$3million of net income. Its EBIT was \$6 million, and its tax was 40 percent. What was its interest expense? Hint; Write out the headings for an income statement and then fill in the known values. Then divide \$3 million of the net income by (1 –T) = (0.6 to find the pretax income. The difference between EBIT and taxable income must be the interest expense. Use this same procedure to work some of the other problems.

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