All of Schnider Company's sales and expenses last year were for cash. The tax rate was 30%. If the net cash inflow (after taxes) last year was $18,900, and if the total gross cash sales were $75,000, then the total cash expenses before taxes must have been:

Question

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To find the total cash expenses before taxes, we first calculate the net income before taxes. The net cash inflow after taxes is $18,900, which means the net income before taxes was $18,900 / (1 - 0.30) = $27,000. Since the gross cash sales were $75,000, the total cash expenses before taxes must have been $75,000 - $27,000 = $48,000.

All of Schnider Company's Sales and Expenses Last Year Were