TNR Corporation Is Preparing Its Budgeted Income Statement for the Month

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