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TiliK225 [7]
3 years ago
10

The owner of a bicycle repair shop forecasts revenues of $188,000 a year. Variable costs will be $57,000, and rental costs for t

he shop are $37,000 a year. Depreciation on the repair tools will be $17,000.Prepare an income statement for the shop based on these estimates. The tax rate is 40%.
Business
1 answer:
Umnica [9.8K]3 years ago
7 0

Answer:

Revenues=$188,000

Less: Variable Costs=$57,000

Less: Rentals=$37,000

Earnings before depreciation and tax=$94,000

Less: Depreciation =$17,000

Earnings before tax=$77,000

Less: Tax40%=$30,800

Net Income=$46,200

a) Dollars in minus dollars out

Dollars in = Revenues = $188,000

Dollars out = Variable cost + Rentals + Tax = $57,000 + $37,000 + $30,800 = $124,800

Operating cash flow = $188,000 - $124,800 = $63,200

b) Adjusted accounting profits

Operating cash flow = Net income + Depreciation = $46,200 + $17,000 = $63,200

c) Add back depreciation tax shield

Operating cash flow = Earnings before depreciation and tax x (1 - tax rate) + Depreciation tax shield

or, Operating cash flow = $94,000 x (1 - 0.40) + $17,000 x 40% = $63,200

Yes, all the results are same.

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A notary signing agent wants to stand out from other NSA's by guaranteeing to borrowers. This is prohibited if it is stated to be a guarantee.

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2 years ago
Recently, Job P951 was completed with the following characteristics: Number of units in the job 100 Total direct labor-hours 100
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Answer:

$2,851

Explanation:

The above is an incomplete question. However, a similar question is as seen below

Dehner corporation uses a job order costing system with a single plant wide predetermined overhead rate based on direct labor hours. The company based its predetermined overhead rate for the current year on the following data.

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If Clancy's boss is interested in a graphical representation of the relationship between the price and quantity of televisions d
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