Carlisle Carpets has cost of goods sold of $92,511, interest expense of $4,608, dividends paid of $3,200, depreciation of $14,568, an increase in retained earnings of $11,920, and a tax rate of 21 percent. What is the operating cash flow?

Question

Quizplus · Accepted Answer

The operating cash flow is calculated as follows:Operating cash flow = Net income + Depreciation - Increase in retained earningsNet income = Revenue - Cost of goods sold - Interest expense - Depreciation - TaxesRevenue = Cost of goods sold + Interest expense + Dividends paid + Depreciation + Increase in retained earnings + TaxesTaxes = Net income * Tax rateNet income = $92,511 + $4,608 + $3,200 + $14,568 + $11,920 - $14,568 * 0.21Net income = $111,271Operating cash flow = $111,271 + $14,568 - $11,920Operating cash flow = $113,919

Carlisle Carpets Has Cost of Goods Sold of $92,511, Interest