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During 2010, Raines Umbrella Corp. had sales of $850,000. Cost of goods sold, administrative and selling expenses, and depreciation expenses were $610,000, $110,000 and $140,000, respectively. In addition, the company has an interest expense of $85,000 and a tax rate of 35 per cent. (Ignore any tax loss carry-back or carry-forward provisions.) a. What is Raines net income for 2010? b. What is its operating cash flow? c. Explain your results in (a) and (b).

During 2010, Raines Umbrella Corp. had sales of $850,000. Cost of goods sold, administrative and selling expenses, and depreciation expenses were $610,000, $110,000 and $140,000, respectively. In addition, the company has an interest expense of $85,000 and a tax rate of 35 per cent. (Ignore any tax loss carry-back or carry-forward provisions.) a. What is Raines net income for 2010? b. What is its operating cash flow? c. Explain your results in (a) and (b).

FINANCIAL ACCOUNTING
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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During 2010, Raines Umbrella Corp. had sales of $850,000. Cost of goods sold, administrative and selling expenses, and depreciation expenses were $610,000, $110,000 and $140,000, respectively. In addition, the company has an interest expense of $85,000 and a tax rate of 35 per cent. (Ignore any tax loss carry-back or carry-forward provisions.) a. What is Raines net income for 2010? b. What is its operating cash flow? c. Explain your results in (a) and (b).
Transcribed Image Text:During 2010, Raines Umbrella Corp. had sales of $850,000. Cost of goods sold, administrative and selling expenses, and depreciation expenses were $610,000, $110,000 and $140,000, respectively. In addition, the company has an interest expense of $85,000 and a tax rate of 35 per cent. (Ignore any tax loss carry-back or carry-forward provisions.) a. What is Raines net income for 2010? b. What is its operating cash flow? c. Explain your results in (a) and (b).
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