Question

During 2018, Raines Umbrella Corp. had sales of $739,000. Cost of goods sold, administrative and selling expenses, and depreciation expenses were $454,000, $99,000, and $144,500, respectively. In addition, the company had an interest expense of $72,200 and a tax rate of 24 percent. (Ignore any tax loss carryforward provisions and assume interest expense is fully tax deductible.)

  

a.	What is the company’s net income/loss for 2018? (Do not round intermediate calculations. Enter your answer as a positive value.)
b.	What is the company's operating cash flow? (Do not round intermediate calculations.)

Answer 1

1)	Sales	739,000
	Cost of Goods sold	454,000
	Gross profit	285,000
	admin and selling expense	99,000
	Depreciation	144,500
	EBIT	41,500
	Interest Expense	72,200
	EBT	(30,700)
	Tax Expense	-
	company’s net (loss) for 2018	(30,700)
2)	Net loss	(30,700)
	Add: Depreciation	144,500
	Net cash flow from operating activity	113,800