value: 0.00 points During the year, Belyk Paving Co. had sales of $2,397,000. Co
ID: 2825305 • Letter: V
Question
value: 0.00 points During the year, Belyk Paving Co. had sales of $2,397,000. Cost of goods sold, administrative and selling expenses, and depreciation expense were $1,428,000, $435,300, and $490,300, respectively. In addition, the company had an interest expense of $215,300 and a tax rate of 30 percent. (Ignore any tax loss carryback or carryforward provisions.) a. What is the company's net income? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to the nearest whole number, .g,32.) Net income $ b. What is it's operating cash flow? (Do not round intermediate calculations and round your answer to the nearest whole number, e-g., 32) Operating cash flow 533700Explanation / Answer
Sales = 2,397,000
COGS = 1,428,000
Other Expenses = 435,300
Depreciation = 490,300
EBIT = Sales - COGS - Other expenses - Depreciation = 2,397,000 - 1,428,000 - 435,300 - 490,300 = $43,400
Earnings before tax = EBIT - Interest = 43,400 - 215,300 = - $171,900
Since it is a loss, income tax = 0
Therefore net income = - 171,900 (This is a Loss) ---> Answer
OCF = EBIT + Depreciation - Taxes = 43,400 + 490,300 - 0 = $533,700 ---> Answer
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