During the year, Belyk Paving Co. had sales of $2,399,000. Cost of goods sold, a
ID: 2673521 • Letter: D
Question
During the year, Belyk Paving Co. had sales of $2,399,000. Cost of goods sold, administrative and selling expenses, and depreciation expense were $1,426,000, $435,100, and $490,100, respectively. In addition, the company had an interest expense of $215,100 and a tax rate of 40 percent. (Ignore any tax loss carryback or carryforward provisions.)Required:
(a) What is Belyk’s net income? (Do not include the dollar sign ($). Negative amount should be indicated by a minus sign.)
Net income $
(b) What is Belyk’s operating cash flow? (Do not include the dollar sign ($).)
Operating cash flow $
Explanation / Answer
a) the income statement of company is
sales ------------------------------------------ $2,399,000
costs-------------------------------------------$1,426,000
Administrative and selling expenses------ $ 435,100
depreciation expenses--------------------- $ 490,100
----------------------------------------------------------------
EBIT ------------------------------------------$ 47800
interest expenses---------------------------$215,100
---------------------------------------------------------------
EBIT------------------------------------------ - $167,300
taxes----------------------------------------- 0
--------------------------------------------------------------
Net income ==========================-$167,300
-------------
b)OCF = EBIT+Depreciation-taxes
= $47800+$490,100-0
= $537,900
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.