Question

, has gathered the following Depreciation and accounting cash flow A firm in the third year of depreciating its only asset, which originally cost $180,000 and has a 5-year MACRS recovery period data relative to the current year's operations: Accruals Current assets Interest expense Sales revenue Inventory Total costs before depreciation, interest and taxes Tax rate on ordinary income $15,000 120,000 15,000 400,000 70,000 290,000 21% a. Use the relevant data to determine the operating cash flow for the current year. b. Explain the impact that depreciation, as well as any other noncash charges, has on a firm's cash flows. a. Complete the following table to determine the operating cash flow (OCF): (Round to the nearest dollar.) Operating Cash Flow Sales revenue Less: Total costs before depreciation, interest, and taxes Depreciation expense Earnings before interest and taxes Less: Taxes at 21% Net operating profit after taxes (NOPAT)

please read questions because this is third time no body can answer i attached one of wrong answers

Answer 1

b) There no no impact on cash flow statement for depreciation, non cash expenses since t

here is no actual outflow of cash.

Non cash expenses includes - Depreciation, Bad debts, amortization, warranty expenses etc

a) Cash flow statement ( Direct Method )

Sales revenue $ 400000

Less: Total cost before interest and taxes $ 290000

Less : Interest expenses $ 15000

Less: Tax expenses (W.N )    $12390 $ 317390

Operating Cash flows for the year $ 82610

Working notes:

Sales revenue $ 400000

Less : total cost before interest and and depreciation $ 290000

Less : Interest $ 15000

Less: Depreciation {180000/5}    $ 36000 $ 341000

Net Income    $ 59000