In 2014, Wire Corp. had sales of $980,000. Cost of goods sold, administrative an

Question

In 2014, Wire Corp. had sales of $980,000. Cost of goods sold, administrative and selling expenses, and depreciation expenses were $675,000, $85,000, and $190,000, respectively. In addition, the company had an interest expense of $51,000 and a tax rate of 35 percent. (Ignore any tax loss carryback or carryforward provisions.) a. What is Wire’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.) Operating cash flow $

Explanation / Answer

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Sales 980,000 Cost of Goods sold 675000 Administrative Expenses 85000 EBIDTA 220,000 (sales - Cost of goods sold - administrative expenses Depreciation 190,000 EBIT 30,000 EBIDTA - Depreciation Tax 10500 EBIT * Tax rate Net Income 19,500 EBIT-tax Depreciation 190,000 Operating Cash flow 209,500 Net income + Depreciation

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