$20.$ MasterTech is a new software company that develops and markets

productivity software for municipal government applications. In developing their

income statement, the following formulas are used:

gross profit $=$ net sales $-$ cost of sales

net operating profit $=$ gross profit $-$ administrative expenses $-$ selling expenses

net income before taxes $=$ net operating profit $-$ interest expense

net income $=$ net income before taxes $-$ taxes

Net sales are expected to be $$1,250,000.$ Cost of sales

is estimated to be $$300,000.$ Selling expenses have

a fixed component that is estimated to be $$90,000$

and a variable component that is estimated to be $8\%$

of net sales. Administrative expenses are $$50,000.$

Interest expenses are $$8,000.$ The company is taxed

at a $50\%$ rate. Develop a spreadsheet model to calcu$-$

late the net income. Design your spreadsheet using

good spreadsheet$-$engineering principles. Please show excel work and formulas. $\backslash$table$[[,,,,],[$NasterTech Sales,$$,1,250,000\mathrm{.}00,,],[$Cost of Sales,$$,300,000\mathrm{.}00,,],[$Gross Profit,$$,950,000\mathrm{.}00,,],[$Sales Expenses $($fixed$),$$$,90,000\mathrm{.}00,,],[$Total Sales Expenses,,,,$],[$Administrative Expenses,$$,50,000\mathrm{.}00,,],[$Net Operating Profit,,,,$],[$Interest Expenses,$$,,,],[$Net Income Before Taxes,,,,$],[$Taxes$,,,,],[$NET INCOME,,,,$],[,,,,]]$