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Ferragosto Services Ltd provided the following comparative balance sheets and income statement for the current year Ferragosto Services Ltd Income Statement For the Year Ended December

Ferragosto Services, Ltd. provided the following comparative balance sheets and income statement for the current year. Ferragosto Services, Ltd. Income Statement For the Year Ended December, 31 Current Year Service Revenue……………………………………….. $ 707,475 Selling, General, and Administrative Expenses………... (280,100) Depreciation Expense…………………………………... (75,900) Bad Debt Expense……………………………………… (20,000) Income before Interest and Taxes………………………. $ 331,475 Interest Expense………………………………………… (25,000) Income before Tax………………………………………. $ 306,475 Tax at 40%......................................................................... (122,590) Net Income……………………………………………… $ 183,885 Additional Information: 1. Ferragosto included the $ 24,150 loss on disposal of investments in Selling, General, and Administrative Expenses on the income statement. 2. Accrued liabilities relate to Selling, General and Administrative Expenses. 3. All dividends declared are paid in cash. 4. All interest and taxes are paid in cash. 5. Acquisitions of land and property, plant and equipment used cash only. Required Prepare Ferragosto’s cash flow statement for the current year under the indirect method. Assume accrued liabilities relate to Selling, General and Administrative Expenses

May 22 2020 View more View Less

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