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During the year, RIT Corp. had sales of $565,600. Costs of goods sold, and depreciation expenses were $476,000, and $42,800, respectively. In addition, the company had an interest expense of $112,000 and a tax rate of 22 percent. What is the operating cash flow for the year

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sadddamkashmiri801

Answer:

Cash flows from Operating activities is $30800

Explanation:

The first thing that we will calculate is the Net Profit for the year thereafter we will calculate the operating cash flow for the year.

Step 1: Calculate is the Net Profit for the Year

Sales                                                     $5,65,600

Less: Cost of Goods Sold                   ($4,76,000)

Gross margin                                         $89,600

Less: Admin and Selling expenses      ($58800)

Less: Depreciation                  ($42,800)

Less: Interest expense                         ($112,000)

Net income before tax                           (124000)

Less: tax                                                       -

Net income after tax                             ($1,24,000)

Step 2: Now we will calculate the Cash flow from Operating activities

Net income after tax                             ($1,24,000)

Add: Depreciation                                   $42,800

Add: Interest                                           $1,12,000

Cash flow from Operating activities    $30800

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