Question

12 | A Ă po < Aavo.A AaBbce Normal Аавьсс No Spacing AaBbcc AaBbcc Heading 1 Heading 2 AaBbcc Heading 3 Paragraph a Styles Q2 B. (20 Marks) Sheryl's Shingles had sales of $10,000 in 1997. The cost of goods sold was $6,500, general and administrative expenses were $1,000, interest expenses were $500, and depreciation was $1,000. The firm's tax rate is 35 percent. What is earnings before interest and taxes? b. What is net income? C. What is cash flow from operations? a.

Answer 1

A A B с 1 Particulars Amount 2 a Sales $ 10,000 3 Less: Cost of goods sold $ 6,500 4 Gross Margin $ 3,500 5 Less: General and administrative expenses S 1,000 6 Less: Depreciation $ 1,000 7 Earnings before interest and taxes S 1,500 8 9 b Earnings before interest and taxes $ 1,500 10 Less: Interest Expense $ 500 11 Earning before taxes $ 1,000 12 Less: Taxes @35% $ 350 13 Net Income S 650 14 S 15 650 1,000 16 c Net Income 17 Add: Depreciation 18 Working Capital changes 19 Cash flow from operating activities $ $ $ S 1,650