Question

Oriole Rental Company provided the following information to its auditors. For the year ended March 31, 2017, the company had revenues of $876,223, general and administrative expenses of $352,479, depreciation expenses of $131,455, leasing expenses of $108,195, and interest expenses equal to $78,122. If the company's average tax rate is 34 percent, what is the cash flow from operating activity for Oriole Rental? (Round intermediate calculations and final answer to the nearest whole dollar, e.g. 5,275.) Cash flow from operation

Answer 1

the cash flow from operation is $267,397

Explanation:

Given that

Revenues be $876,223

General and admin expense $352,479

Depreciation expense $131,455

Leasing expense $108,195

Interest expense $78,122

Tax rate is 34%

We need to find out the cash flow from operation

As we know that

Cash flow from operation = (Revenue - general & admin expense - depreciation - leasing - interest) × (1 - tax rate) + depreciation

= ($876,223 - $352,479 - $131,455 - $108,195 - $78,122) × (1 - 0.34) + $131,455

= $205,972 × (1 - 0.34) + $131,455

= $267,397

Hence, the cash flow from operation is $267,397