Peter and Pang both enjoy the sunshine, water, and surfboards. Thus, the two friends decided to create a business together renting surfboards, paddle boats, and inflatable devices in California. Peter and Pang will equally share in the decision-making and in the profits or losses. Which type of business did they create if they both have full personal liability for the firm's debts?

a.

General partnership

b.

Sole proprietorship

c.

Limited partnership

d.

Joint-stock company

During the year, The Harry Firm had sales of $3,210,000. Cost of goods sold, administrative and selling expenses, and depreciation expenses were $2,540,000, $389,000, and $112,000, respectively. In addition, the company had an interest expense of $118,000 and a tax rate of 34 percent. (Ignore any tax loss carryback or carryforward provisions.) What is its operating cash flow?

a.

$273,330

b.

$285,400

c.

$271,420

d.

$263,660