Last year,the sales at Jersey Company were $200,000 and were all cash sales.The tax-deductible expenses at Jersey were $125,000 and were all cash expenses.The tax rate was 30%.What was the after-tax net cash inflow at Jersey last year from these operations?

Question

Quizplus · Accepted Answer

The after-tax net cash inflow is calculated as: Sales - Expenses - Taxes. Taxes are calculated on the profit (Sales - Expenses), so: $200,000 - $125,000 = $75,000 (profit). Taxes are 30% of $75,000, which is $22,500. Therefore, the after-tax net cash inflow is $75,000 - $22,500 = $52,500.

Last Year,the Sales at Jersey Company Were $200,000 and Were