Chapter 23, Problem 2BE

Stevenson Corporation reported a pretax book income of $500,000 in 2022. Included in the computation were favorable temporary differences of $60,000, unfavorable temporary differences of $25,000, and favorable permanent differences of $50,000. What is the book equivalent of taxable income for Stevenson Corporation? Ans

The 2014 balance sheet of Sugarpova's Tennis Shop, Inc., showed long- term debt of $6.1 million, and the 2015 balance sheet showed long- term debt of $6.3 million. The 2015 income statement showed an interest expense of $210,000. During 2015, the company had a cash flow to creditors of $10,000 and the cash flow to stockholders for the year was $65,000. Suppose you also know that the firm's net capital spending for 2015 was $1,460,000 and that the firm reduced its net working capital investment by $87,000. What was the firm's 2015 operating cash flow, or OCF?

A company sells goods at a mark-up of 80% on cost. The total sales revenue is $500,000. What is the cost of sales?