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1 October, 15:27

he following data are to be used for Questions 4 and 5. The parentheses indicate amounts that should be subtracted in the computation of net income. Cost of goods sold (6,000) Income tax expense (600) Interest expense (250) Operating, selling, general and administrative expenses (2,300) Sales 10,000 What is the company's income tax RATE?

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  1. 1 October, 18:07
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    t = 0.4138

    Explanation:

    First, we need to accommodate the information:

    Sales = 10,000

    COGS = 6000 (-)

    Gross profit = 4000

    Operating, selling, general and administrative expenses = 2300 (-)

    Net operating income = 1700

    Interest = 250 (-)

    Earnings before taxes = 1450

    TAX = 600 (-)

    Net income = 850

    t=?

    t = 600/1450 = 0.4138
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