Building an Income Statement During the year, the Senbet Discount Tire Company had gross sales of $1 million. The firm’s cost of goods sold and selling expenses were $300,000 and $200,000, respectively. Senbet also had notes payable of $1 million. These notes carried an interest rate of 10 percent. Depreciation was $100,000. Senbet’s tax rate was 35 percent.

a. What was Senbet’s net income?

b. What was Senbet’s operating cash flow? LO.1