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  • 1.  Question in Section A Related to income statement.

    Posted 06-06-2020 04:27 AM
    Dear All, Please help me to solve the question related to income statement in Section A,

    A Entity has a 50% gross margin, General & Admin expenses $50, Interest Expense of $20, and the net income of $10 for the year just ended. if the corporate rate is 50%, what is the level of sales revenue for the year just ended: 

    A. $90
    B. $135
    C. $150
    D. $180

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    Zaeem
    Student
    Lahore, Pakistan
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  • 2.  RE: Question in Section A Related to income statement.

    Posted 06-06-2020 07:29 AM
    Gross revenue  $90
    G&A Expenses ($50)
    Interest Expenses ($20)
    Income before Tax $20
    Tax(50%) ($10)
    Net income $10​

    Sales Revenue = $90 / 50% = $180

    My answer is D.

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    Mengrong Lin
    Accountant
    New Taipei City
    Taiwan
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    Original Message


  • 3.  RE: Question in Section A Related to income statement.

    Posted 06-06-2020 07:30 AM
    First, calculate Net income before tax = 10/0.5= 20
    50% Gross margin means 100% markup, let sales = X then, COGS = 50% of X = 0.5X
    The equation:
    Net income before tax = sales - COGS - G&A - Interest expense
    20 = X - 0.5X - 50 - 20
    20 = 0.5X - 70
    90 = 0.5X
    X = 180

    Answer D


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    Adham Mourad
    Accountant
    Doha
    Qatar
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    Original Message


  • 4.  RE: Question in Section A Related to income statement.

    Posted 06-07-2020 10:26 AM
      |   view attached
    $180

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    Rochelle Times
    Accountant
    Houston TX
    United States
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    Original Message