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income statement

Maneesh 30 April 2020 at 15:59 PM

A company has a 50% gross margin, general and administrative expenses of $50, interest expense of $20, and net 
income of $10 for the year just ended. If the corporate tax rate is 50%, the level of sales revenue for the year just 
ended was
A)$135
B)$90
C)$180
D)$150

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FACULTY 10 May 2020 at 05:17 PM

Net income = 10

tax rate = 50%

then net income before tax= 10*50/100

                                                 =20

gross profit = net  income before tax+ interest + administration expense  (20+50)

                     =20+20+50

                    =90


gross margin = 50%

then, sales     = 90*100/50

       =180

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