Henson Pharmaceuticals reported net income for 2018 of $4.8 million on total revenues of $44 million....

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Question

Henson Pharmaceuticals reported net income for 2018 of $4.8 million on total revenues of $44 million....

Henson Pharmaceuticals reported net income for 2018 of $4.8 million on total revenues of $44 million. Depreciation expense totaled $930,000. What were total cash expenses for 2018? Assume that depreciation is a non-cash expense.

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Answer 1

Answer #1

Net Income reported = 4.8 million

Total Revenue for 2018 = 44 million

Net Income = Total Revenue - Total Expenses (including depreciation)

4.8 million = 44 million - Total Expenses

Total expenses (including depreciation) = 44 million - 4.8 million = 39.2 millions

Now,

Total cash expenses = Total expenses - Non cash expenses (i. e depreciation)

Cash expenses = 39.2 million - 0.93 million (as given in question)

Cash expenses = 38.27 millions

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Answer 2

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