Given the following statement of comprehensive income data, calculate operating cash flow: net sales = $16,500, cost of goods sold = $10,350, operating expenses = $3,118, depreciation = $1,120, interest expense = $900, tax rate = 34%.

Question

Quizplus · Accepted Answer

Operating cash flow is calculated as: Net Income + Depreciation. First, calculate Net Income: Sales - COGS - Operating Expenses - Depreciation - Interest Expense = Earnings Before Tax (EBT). EBT = $16,500 - $10,350 - $3,118 - $1,120 - $900 = $1,012. Tax = 34% of EBT = $344.08. Net Income = EBT - Tax = $667.92. Operating Cash Flow = Net Income + Depreciation = $667.92 + $1,120 = $1,787.92. However, the correct calculation should include adding back depreciation to the operating income before tax, leading to the correct answer of $2,687.92.

Given the Following Statement of Comprehensive Income Data, Calculate Operating