A company has been accused of financial fraud by inflating its revenue by creating fake invoices. You have been hired as a forensic accountant to investigate the fraud. You have obtained the following information:

• The company reported revenue of $5 million in the year in question.
• The average gross margin of the company's industry is 40%.
• The company's reported gross margin was 50%.

Using the information provided, determine the minimum amount of revenue the company could have fraudulently reported. Show all your calculations and provide your answer.

Answer rating: 100% (QA)

The detailed answer for the above question is provided below Step 1 Determine the industry average c... View the full answer