Use the Table for the Question(s)below

question 34

Multiple Choice

Use the table for the question(s) below.
AOS Industries Statement of Cash Flows for 2008
-Consider the above statement of cash flows.In 2008,AOS Industries had contemplated buying a new warehouse for $2 million,the cost of which would be depreciated over 10 years.If AOS Industries has a tax rate of 25%,what would be the impact for the amount of cash held by AOS at the end of the 2008?

• A)It would have $2,000,000 less cash at the end of 2008.
• B)It would have $1,950,000 less cash at the end of 2008.
• C)it would have $150,000 less cash at the end of 2008.
• D)it would have an additional $50,000 in cash at the end of 2008.

---

Definitions:

Operating Expenses

Regular costs associated with operating a business, such as rent, utilities, and payroll.

Net Income

The final amount of profit a company declares after reducing its total revenue by the incurred taxes and expenses.

Single-Step Income Statement

A simplified income statement that calculates net income by subtracting total expenses from total revenues with only one step.

Multiple-Step Income Statement

An income statement format that separates operating transactions from non-operating transactions, providing a detailed analysis of revenue and expenses.