Last year,the sales at Seidelman Company were $700,000 and were all cash sales.The company's tax-deductible expenses were $450,000 and were all cash expenses.The tax rate was 35%.What was the after-tax net cash inflow at Seidelman last year?

Question

Quizplus · Accepted Answer

To find the after-tax net cash inflow, we need to first calculate the taxable income:
Taxable income = Sales - Tax-deductible expenses
Taxable income = $700,000 - $450,000
Taxable income = $250,000
Next, we need to calculate the taxes owed:
Taxes owed = Taxable income * Tax rate
Taxes owed = $250,000 * 0.35
Taxes owed = $87,500
Finally, we can calculate the after-tax net cash inflow:
After-tax net cash inflow = Sales - Tax-deductible expenses - Taxes owed
After-tax net cash inflow = $700,000 - $450,000 - $87,500
After-tax net cash inflow = $162,500
Therefore, the best choice is B, with an after-tax net cash inflow of $162,500.

Last Year,the Sales at Seidelman Company Were $700,000 and Were