value 000 points During the year Belyk Paving Co had sales o

value: 0.00 points During the year, Belyk Paving Co. had sales of $2,397,000. Cost of goods sold, administrative and selling expenses, and depreciation expense were $1,428,000, $435,300, and $490,300, respectively. In addition, the company had an interest expense of $215,300 and a tax rate of 30 percent. (Ignore any tax loss carryback or carryforward provisions.) a. What is the company\'s net income? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to the nearest whole number, .g,32.) Net income $ b. What is it\'s operating cash flow? (Do not round intermediate calculations and round your answer to the nearest whole number, e-g., 32) Operating cash flow 533700

Solution

Sales = 2,397,000

COGS = 1,428,000

Other Expenses = 435,300

Depreciation = 490,300

EBIT = Sales - COGS - Other expenses - Depreciation = 2,397,000 - 1,428,000 - 435,300 - 490,300 = $43,400

Earnings before tax = EBIT - Interest = 43,400 - 215,300 = - $171,900

Since it is a loss, income tax = 0

Therefore net income = - 171,900 (This is a Loss) ---> Answer

OCF = EBIT + Depreciation - Taxes = 43,400 + 490,300 - 0 = $533,700 ---> Answer