6. 16.

Profit for the year and OFC [LO 2.2] During 2020, Mungindi Umbrella Ltd had revenue of $705 000. Cost of sales, administrative and distribution costs, and depreciation expenses were $445 000,

$95 000 and $140 000, respectively. In addition, the company had a finance cost of $70 000 and a tax rate of 30 per cent. (Ignore any tax loss carry-forward provisions and assume finance cost is fully deductible.)

1. What is the company’s profit for the year for 2020?

2. What is its operating cash flow?

3. Explain your results in

(a) and (b).