Question

Question 5
	Revenue			1,200.0000
	Cost of good sold			800.0000
	Gross profit
	Total operating expense			190.0000
	Operating income
	Interest expense			15.0000
	Earnings before tax
	Tax
	Net income
	TAX RATE	40%
	With tax rate of 40%, what must be Total operating expense so that Net income equal to 50?

Question 6
	Revenue			1,200.0000
	Cost of good sold			800.0000
	Gross profit
	Total operating expense			500.0000
	Operating income
	Interest expense			15.0000
	Earnings before tax
	Tax
	Net income
	TAX RATE	40%
	With tax rate of 40%, what must be Total operating expense so that Net Profit Margin equal to 10%?

Question 7
	Revenue			1,200.0000
	Cost of good sold			800.0000
	Gross profit
	Total operating expense			190.0000
	Operating income
	Interest expense			15.0000
	Earnings before tax
	Tax
	Net income
	TAX RATE	40%
	With tax rate of 40%, what must be Total operating expense so that Net Profitequal to 0?

Answer 1

Q5)
Particulats	Calculations	Amount
Revenue	given	1200.0000
COGS	given	800.0000
Gross Profit	=1200-800	400.0000
Total operating expense	Balancing figure = 400-0-15-83.3333=301.6667	301.6667
Operating income	given	0.0000
Interest expense	given	15.0000
EBT	=net income/(1-tax rate) =50/(1-0.4) = 83.3333	83.3333
Tax	=EBT* tax rate = 83.3333*0.40 = 33.3333	33.3333
Net Income	given	50.0000
Q6)
Revenue	given	1200.0000
COGS	given	800.0000
Gross Profit	=1200-800	400.0000
Total operating expense	Balancing figure = 400-0-15-200 = 185.0000	185.0000
Operating income	given	0.0000
Interest expense	given	15.0000
EBT	=net income/(1-tax rate) =120/(1-0.4) = 200.0000	200.0000
Tax	=EBT* tax rate = 200.0000*0.40 = 80.0000	80.0000
Net Income	=Net profit margin*Revenue = 0.10*1200 =120.0000	120.0000
Q7)
Revenue	given	1200.0000
COGS	given	800.0000
Gross Profit	=1200-800	400.0000
Total operating expense	Balancing figure = 400-0-15-0=385.0000	385.0000
Operating income	given	0.0000
Interest expense	given	15.0000
EBT	=net income/(1-tax rate) =0/(1-0.4) = 0	0.0000
Tax	=EBT* tax rate = 0*0.40 = 0	0.0000
Net Income	given	0.0000

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