During 2014, Raines Umbrella Corp. had sales of $880,000. Cost of goods sold, ad

Question

During 2014, Raines Umbrella Corp. had sales of $880,000. Cost of goods sold, administrative and selling expenses, and depreciation expenses were $580,000, $90,000, and $135,000, respectively. In addition, the company had an interest expense of $91,000 and a tax rate of 35 percent. (Ignore any tax loss carryback or carryforward provisions.)

a. What is Raines’s net income for 2014? (Do not round intermediate calculations. Input the amount as a positive value.) $

b. What is the company's operating cash flow? (Do not round intermediate calculations.)

Explanation / Answer

Ans) Raines Umbrella Corp NET INCOME FOR 2014 Sales $ 880,000.00 Cost of goods sold $ 580,000.00 Gross Profit $ 300,000.00 Administerative & Selling expenses $    90,000.00 Depreciation $ 135,000.00 EBIT $    75,000.00 Interest $    91,000.00 Taxable Income $ (16,000.00) Taxes $                   -   Net Income $ (16,000.00) Operating Cash Flow Sales $ 880,000.00 Cost of goods sold $ 580,000.00 Gross Profit $ 300,000.00 Administerative & Selling expenses $    90,000.00 Depreciation $ 135,000.00 EBIT $    75,000.00 Interest $    91,000.00 Taxable Income $ (16,000.00) EBIT $    75,000.00 Depreciation $ 135,000.00 Operating Cash Flow $ 210,000.00

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