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During 2014, Eagle Beach Company EBC) had sales of $1,000,000, cost of goods sold of $425,000,...

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Accounting

During 2014, Eagle Beach Company EBC) had sales of $1,000,000,cost of goods sold of $425,000, administrative and selling expensesof $95,000, depreciation expense of $140,000 and interest expenseof $70,000. The tax rate is 35 percent. Ignore any tax losscarryback or carry forward provisions. What is the operating cashflow for EBC?

A. $340,000

B.$385,500

C.$361,000

Answer & Explanation Solved by verified expert
4.3 Ratings (869 Votes)

Sales revenue $     10,00,000
Less:
Cost Of Goods Sold $       4,25,000
Gross Profit $       5,75,000
Less:
Selling And Admin Expenses $           95,000
Depreciation 140000
Interest Expenses $           70,000
Net Income Before Tax $       2,70,000
Tax @ 35% $           94,500
Net Income After Tax $       1,75,500
Add: Depreciation $       1,40,000
Interest Expenses $           70,000
Cash Flow From Operation $       3,85,500
Correct Option: B

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