During the year, the Senbet Discount Tire Company had gross sales of $1.26 milli

Question

During the year, the Senbet Discount Tire Company had gross sales of $1.26 million. The firm’s cost of goods sold and selling expenses were $545,000 and $235,000, respectively. The firm also had notes payable of $1,000,000. These notes carried an interest rate of 5 percent. Depreciation was $150,000. The firm’s tax rate was 35 percent. What was the firm’s net income? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Round your answer to the nearest whole number, e.g., 32.) What was the firm’s operating cash flow? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Round your answer to the nearest whole number, e.g., 32.)

Explanation / Answer

Gross Sales 1260000 Cost of Goods sold 545000 Selling Expenses 235000 780000 Gross Income 480000 Less: Interest 1000000*5% -50000 Less: Depreciation -150000 Income before 280000 Less: Taxes 35% -98000 Net Income 182000

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