Question

What is the operating cash flow for Micheal's Bakery given the below information for the company?

Sales $135,000
COGS 59,000
Depreciation Expense 25,000
Interest paid 12,000
Tax rate 21%

a. $58,860
b. $56,000
c. $66,760
d. $74,660
e. $67,810

Answer 1

e. $67,810

Step-by-step explanation:

Tax expense is

(Sales - COGS - Depreciation - Interest Paid) * 21%

($135,000 - $59,000 - $25,000 - $12,000) * 21%

$39,000 * 21% = $8190

Operating Income is (Income before tax - Tax)

$39000 - $8190 = $30,810

Operating Cashflow is

Income after tax + Depreciation + Interest Expense

($30,810 + $25,000 + $12,000)

= $67,810