During 2014, Raines Umbrella Corp. had sales of $740,000. Cost of goods sold, ad

Question

During 2014, Raines Umbrella Corp. had sales of $740,000. Cost of goods sold, administrative and selling expenses, and depreciation expenses were $550,000, $90,000, and $95,000, respectively. In addition, the company had an interest expense of $94,000 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

net income = 740000 - 550000 -90000 - 95000 - 94000 = -89000

b)

operating cash flow = -89000 + 94000 + 95000 = 1000000

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