Question

Smarton Company is in the process of preparing its budgeted income statement. It has determined its estimated gross margin to be $90,000. The company also expects to incur selling and administrative expenses of $30,000 and interest expense of $12,000. What would be Smarton's budgeted net income? A) $48,000 B) $60,000 C) $30,000 D) $18,000

Answer 1

Answer:

A) $48,000

Explanation:

$Gross Margin - S&A expenses Equals to Operative Income$

Then:

$Operative Income - Interest Expense Net Income$

Assuming there is no tax rate

$90,000 - 30,000 - 12,000 = 48,000$

48,000 would be the net income