Question

# Complete the following Income Statement for 12/31/2019 with these assumptions which are in no particular order:...

Complete the following Income Statement for 12/31/2019 with these assumptions which are in no particular order:

HINT: Determine revenue as a starting point. If you cannot figure that out put in a number and finish based on rest of the assumptions as this will allow you to receive some points.

1. The company has an Operating Profit Margin of 30%

2. The company has an Account Receivable turnover of 10

3. The Contribution Rate for this company is 40%

4. They have an Interest Coverage ratio of 4

5. All sales for the company were on credit

6. They have a 30% tax rate

7. The account receivable balance as of 12/31/2019 was \$7,000,000

Sales

-Fixed Costs

- Variable Costs

EBIT

- Interest

Profit before Tax

- Tax

Net Income

 Steps Particulars Amont Workings Formulas A Sales 70000000 7000000*10 B=A-C Variable cost 67200000 Sales - contribution C Contribution 2800000 7000000*40% Salesx Contribution ratio D=C-E Fixed Cost 700000 E EBIT 2100000 7000000*30% Operating margin = EBIT/Sales F Interest 525000 2100000/4 EBIT/Interst coverage ratio G=E-F PBT 1575000 H Tax 472500 1575000*30% I=G-H PAT 1102500

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