The owner of a bicycle repair shop forecasts revenues of $$172,000$ a year. Variable costs will be

$$53,000,$ and rental costs for the shop are $$33,000$ a year. Depreciation on the repair tools will

be $$13,000.$

a$.$ Prepare an income statement for the shop based on these estimates. The tax rate is $20\%.$

b$.$ Calculate the operating cash flow for the repair shop using the three methods given

below:

i$.$ Dollars in minus dollars out.

ii$.$ Adjusted accounting profits.

iii. Add back depreciation tax shield.