A few days ago
k 8710

fractions…?

The New Frontier Consulting Company does an audit at the end of each fiscal year. For the last fiscal year the auditing company gave the following report. Three-fifths of the total income was allowable to be deducted for expenses. On the remaining portion New Frontier had to pay two-fifths of that amount for a business income tax. After deductible expenses & income tax were paid, out of the remaining, one-sixth was used for additional research & development and three-tenths was set aside in a cash reserve. This left each of the four partners $160,000. What was the original income for the New Frontier?

so far I have:

x=audit report

x- 3/5x= 2/5x <-- left after deductible 2/5x(2/5)= 4/25x remains @ this point: 2/5x-4/25x=6/25x <--left after tax i cant figure out what to do for this part: "After deductible expenses & income tax were paid, out of the remaining, one-sixth was used for additional research & development and three-tenths was set aside in a cash reserve."

Top 2 Answers
A few days ago
Syed Faizan Tariq

Favorite Answer

you have done correct upto left after tax. i.e. 6/25x

additional research & development= 1/6 of 6/25x equals 1/25x

cash reserve is 3/10 of 6/25x

so assuming that 160000 is paid to each partner equally.

the equation goes like

6/25 x – 1/25 x – (3/10 * 6/25 x) = 160000*4

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A few days ago
omicron_gray
(1/6)(2x/5)=for additional research and dev.

(3/10)(2x/5)=cash reserve

2x/5 – 4x/25 – x/15 – 3x/50 = 640000(4)

Ans. $22,588,235.29

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