Bavarian Sausage, Inc. posted the following income statement: Income Statement S
ID: 2745314 • Letter: B
Question
Bavarian Sausage, Inc. posted the following income statement:
Income Statement
Sales
$525,000
Cost of goods sold
215,000
Depreciation
65,000
Earnings before
interest and taxes
245,000
Interest expense
35,000
Net profit before
taxes
210,000
Taxes (@ 40%)
84,000
Net income
$126,000
What is Bavarian Sausage, Inc.’s operating cash flow? please show work.
Income Statement
Sales
$525,000
Cost of goods sold
215,000
Depreciation
65,000
Earnings before
interest and taxes
245,000
Interest expense
35,000
Net profit before
taxes
210,000
Taxes (@ 40%)
84,000
Net income
$126,000
Explanation / Answer
Operating cash flow= Net income + non cash expenses (deprication)
= 126000 +65000= 191000
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