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Prepare an income statement for the shop

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Reference no: EM133103061

Question - The owner of a bicycle repair shop forecasts revenues of $224,000 a year. Variable costs will be $66,000, and rental costs for the shop are $46,000 a year. Depreciation on the repair tools will be $26,000.

a. Prepare an income statement for the shop based on these estimates. The tax rate is 20%.

b. Calculate the operating cash flow for the repair shop using the three methods given below:

Now calculate the operating cash flow.

-Dollars in minus dollars out.

-Adjusted accounting profits.

-Add back depreciation tax shield.

Reference no: EM133103061

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