The owner of a bicycle repair shop forecasts revenues of $172,000 a year. Variable costs will be $53,000, and rental costs for the shop are $33,000 a year. Depreciation on the repair tools will be $13,000. a. Prepare an income statement for the shop based on these estimates. The tax rate is 20%.
The owner of a bicycle repair shop forecasts revenues of $172,000 a year. Variable costs will be $53,000, and rental costs for the shop are $33,000 a year. Depreciation on the repair tools will be $13,000. a. Prepare an income statement for the shop based on these estimates. The tax rate is 20%.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The owner of a bicycle repair shop
a. Prepare an income statement for the shop based on these estimates. The tax rate is 20%.
b. Calculate the operating
Now calculate the operating cash flow.
- Dollars in minus dollars out.
- Adjusted accounting profits.
- Add back depreciation tax shield
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