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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Transcribed Image Text:Straight Line Method
Accelerated Method
Line item
$Million
Line item
$Million
Revenues
200
Revenues
200
Total Operating Expenses
Total Operating Expenses
Deprecation
130
130
Deprecation
Operating Earning Before Tax
15
25
55
Operating Earning Before Tax
45
Таx 40%
22
Tax 40%
18
Operating Earnings After tax
Depeciation
Operating Earnings After tax
33
27
Depeciation
15
25
After Tax Operating Tax Flow
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?
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