1. Pablo Pinkcasso sold a widely applauded piece Guarnica in 1937. He managed to crunch his numbers, but he needs help building an income statement. In 1937, Pinkcasso reported sales of $248,000. He also reported the following expenses:

- $18,000 in depreciation - $24,000 in fixed costs - $31,000 in variable costs

Pinkcasso does not have any interest expense because he does not have any loans outstanding.

a. Prepare an income statement for 1937 to show Pinkcassos gross profit, EBIT, and net income. Use a 34% tax rate for your calculations.

b. Calculate Pinkcassos Operating Cash Flow (OCF)