Straight Line Method Accelerated Method Line item $Million Line item $Million Revenues 200 Revenues 200 Total Operating Expenses 130 Total Operating Expenses 130 Deprecation 15 Deprecation 25 Operating Earning Before Tax Operating Earning Before Tax 55 45 Tax 40% 22 Tax 40% 18 Operating Earnings After tax 33 Operating Earnings After tax 27 Depeciation After Tax Operating Tax Flow 15 Depeciation 25 48 After Tax Operating Tax Flow 52 SL after tax operating cash flow 48 Accelerated after tax operating cash flow 52 Assuming that the company uses straight-line depreciation for book purposes and accelerated depreciation for tax purposes, show the income statement reported to the stockholders. What is the after-tax operating cash flow under these circumstances?
Straight Line Method Accelerated Method Line item $Million Line item $Million Revenues 200 Revenues 200 Total Operating Expenses 130 Total Operating Expenses 130 Deprecation 15 Deprecation 25 Operating Earning Before Tax Operating Earning Before Tax 55 45 Tax 40% 22 Tax 40% 18 Operating Earnings After tax 33 Operating Earnings After tax 27 Depeciation After Tax Operating Tax Flow 15 Depeciation 25 48 After Tax Operating Tax Flow 52 SL after tax operating cash flow 48 Accelerated after tax operating cash flow 52 Assuming that the company uses straight-line depreciation for book purposes and accelerated depreciation for tax purposes, show the income statement reported to the stockholders. What is the after-tax operating cash flow under these circumstances?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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