Answer:
The operating cash flow for the company is $160,000
Explanation:
First we need to find the net income for the company. Sales were 980,000 and we will subtract costs from this to find the net income.
Net income = Sale-(Costs of good sold+administrative expenses+ depreciation expenses)
Net income= 980,000-(675,000+85,000+190,000)= 30,000
Now we need to find how much tax the company paid
Tax= tax rate* net income
Tax = 0.30*30,000=9,000
Now in order to find the operating cash flow we will start from net income, add depreciation expense to it because depreciation expense is a non cash expense and then subtract interest expense and tax expense from it.
Operating Cash flow = Net income+depreciation expense-interest expense-tax expense.
Operating cash flow = 30,000+190,000-51,000-9,000= 160,000
