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Gamma company income statement includes the following data. The average tax rate is 24%. Cost of goods sold $16,000; Income taxes paid $3,500; Administrative expenses $5,800; Interest expense $1,500; and Depreciation $1,200. a) What is Beta's net income? b) What must have been the Beta's revenues? c) What is EBIT?
HI
Profit before tax*tax rate = tax paid
Profit before tax = 3500/24%
=$14,583.33
Net Income = Profit before tax - tax paid
= 14583.33 - 3500
=$11,083.33
EBIT = Profit before tax + interest
= 11083.33 + 1500
= $12,583.33
Revenue = EBIT + Depreciation + Admin expenses + Cost of goods sold
= 12583.33 + 1200 + 5800 + 16000
=$35,583.33
Thanks