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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

Respuesta :

TomShelby

Answer:

A) $48,000

Explanation:

[tex]$$Gross Margin$$- S&A expenses$$Equals to Operative Income[/tex]

Then:

[tex]$$Operative Income $$- Interest Expense$$Net Income[/tex]

Assuming there is no tax rate

[tex]90,000 - 30,000 - 12,000 = 48,000[/tex]

48,000 would be the net income