Answer:
$476,000 and $369,960
Explanation:
The computation of the cash flows is shown below:
The formula is
= EBIT + Depreciation - Income tax expense
where,
EBIT = Gross profit - Selling and administrative expense - depreciation expense
For Rogers company
= $784,000 - $200,000 - $314,000
= $270,000
where,
The income tax expense equal to
= (Gross profit - Selling and administrative expense - depreciation expense ) × tax rate
= ($784,000 - $200,000 - $314,000) × 40%
= $108,000
So the cash flow is
= 270,000 + $314,000 - $108,000
= $476,000
For Evans company
= $784,000 - $200,000 - $48,900
= $535,100
where,
The income tax expense equal to
= (Gross profit - Selling and administrative expense - depreciation expense ) × tax rate
= ($784,000 - $200,000 - $48,900) × 40%
= $214,040
So the cash flow is
= $535,100 + $48,900 - $214,040
= $369,960
