Question

shows Cost of Sales of $74,000, Administrative Expenses of $20,000, Rental Expenses of $12,000, Interest Revenue of $33,000, Interest Expense of $15,000, and Net Income after Taxes of $60,000. Assuming there are no other items to be considered and that the Income Taxes are 25% of Net Income before Taxes, what is sales revenue

Answer 1

The Sales Revenue is $168,000

Step-by-step explanation:

As we know Net income before tax is calculated by deducting the cost of sales and other operating expenses from sales. We will add back all the expenses to reach at sales amount.

Net incomes before tax then divided into two portion Tax and net income after tax on the basis of tax percentage.

Net income before tax = Net income after tax + Tax

Net income before tax = $60,000 + ( 60,000 x 25% / 75% ) = $60,000 + $20,000 = $80,000

Net income before tax = Sales + other income - Cost of Sales - ( Operating Expenses)

$80,000 = Sales + $33,000 - $74,000 - ( $20,000 + $12,000 + $15,000 )

$80,000 = Sales - $41,000 - $47,000

$80,000 = Sales - $88,000

Sales = 80,000 + $88,000

Sales = $168,000