Calculate the Before-Tax net Cash Flow (BTCF)of the company A hydraulic crane service company had salesrevenue of $2,250,000 from operations during tax-year 1.The following table provides other financial informationrelating to the tax year:Labor expensesMaterials costsDepreciation expenses$550,000$385,000$132,500Interest expensesRental expensesProceeds from sale of old equipment with a $23,000book value of $20,000$22,200$45,000

In this question, we will calculate the before-tax net cash flow (BTCF) of the company. These are…

Answered: A hydraulic crane service company had…

Business

Accounting

A hydraulic crane service company had sale from operations during tax-year 1 2,250,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.

Question

Calculate the Before-Tax net Cash Flow (BTCF)
of the company

A hydraulic crane service company had sales
revenue of $2,250,000 from operations during tax-year 1.
The following table provides other financial information
relating to the tax year:
Labor expenses
Materials costs
Depreciation expenses
$550,000
$385,000
$132,500
Interest expenses
Rental expenses
Proceeds from sale of old equipment with a $23,000
book value of $20,000
$22,200
$45,000

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