QUESTION 39 1. During 2004, the Abel Co. had gross sales of $500,000. The firm\'
ID: 2657021 • Letter: Q
Question
QUESTION 39 1. During 2004, the Abel Co. had gross sales of $500,000. The firm's cost of goods sold and selling expenses were $150,000 and $50,000, respectively. These figures do not include depreciation. Abel also had notes payable of $1,000,000. These notes carried an interest rate of 10 percent. Depreciation was $100,000. Abel's tax rate in 2004 was 35%. What was Abel's net income?$57,500
$62,500
$63,500
$65,000
$67,500 1 points
QUESTION 40 1. In the above question, what was Abel's operating cash flow?
$175,000
$200,500
$233,500
$265,000
$337,500
QUESTION 39 1. During 2004, the Abel Co. had gross sales of $500,000. The firm's cost of goods sold and selling expenses were $150,000 and $50,000, respectively. These figures do not include depreciation. Abel also had notes payable of $1,000,000. These notes carried an interest rate of 10 percent. Depreciation was $100,000. Abel's tax rate in 2004 was 35%. What was Abel's net income?
$57,500
$62,500
$63,500
$65,000
$67,500 1 points
QUESTION 40 1. In the above question, what was Abel's operating cash flow?
$175,000
$200,500
$233,500
$265,000
$337,500
QUESTION 39 1. During 2004, the Abel Co. had gross sales of $500,000. The firm's cost of goods sold and selling expenses were $150,000 and $50,000, respectively. These figures do not include depreciation. Abel also had notes payable of $1,000,000. These notes carried an interest rate of 10 percent. Depreciation was $100,000. Abel's tax rate in 2004 was 35%. What was Abel's net income?
$57,500
$62,500
$63,500
$65,000
$67,500 1 points
QUESTION 40 1. In the above question, what was Abel's operating cash flow?
$175,000
$200,500
$233,500
$265,000
$337,500
Explanation / Answer
Question - 1 .......... Option - D $ 65000
Question - 2
Operating cash flow = Net Income + depreciation + Interest expenses = 65000 + 100000 + 100000
= 265000 .......... option - D
Sales 500000 (-) Cost of goods sold 150000 Gross profit 350000 (-) selling expenses 50000 (-)depreciation 100000 Operating profit 200000 (-) Interest expenses 100000 Earnings before tax 100000 (-) tax rate 35000 NET INCOME 65000