TNR Corporation Is Preparing Its Budgeted Income Statement for the Month

question 109

Multiple Choice

TNR Corporation is preparing its budgeted income statement for the month of August. Budgeted sales are $18,000. Cost of goods sold is twice the amount of operating costs, and operating costs plus cost of goods sold equals 40% of net income. Return on sales (net income / sales) is anticipated to be 50%. TNR does not have any nonoperating items on its income statement.
TNR's expected income tax rate is:

• A) 37.5%
• B) 30.0%
• C) None of the above (but can be determined)
• D) Cannot be determined

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