Question

1. High Tech Wireless just published its current income statement, which shows net income equal to $240,000. The statement also shows that operating expenses were $500,000 before including depreciation, depreciation was $100,000, and the tax rate was 40 percent. If High Tech has no debt, what were its sales revenues

Answer 1

Answer:

$240,000

Explanation:

With regards to the above information,

Sales revenue is computed as;

= Operating expenses + Depreciation × Tax rate

Given that;

Operating expenses = $5,00,000

Depreciation = $100,000

Tax rate = 40%

Sales revenue

= ($500,000 + $100,000) × 0.4

= $600,000 × 0.4

= $240,000