The owner of a bicycle repair shop forecasts revenues of $188,000 a year. Variable costs will be $57,000, and rental costs for the shop are $37,000 a year. Depreciation on the repair tools will be $17,000.a. Prepare an income statement for the shop based on these estimates. The tax rate is 20%.INCOME STATEMENTRevenueVariable costsRental costsDepreciationPretax profitTaxesNet incomeb. Calculate the operating cash flow for the repair shop using the three methods given below:Now calculate the operating cash flow. Dollars in minus dollars out. Adjusted accounting profits. Add back depreciation tax shield. Methods of Calculation Operating Cash Flowi. Dollars in Minus Dollars Out ii. Adjusted Accounting profits iii. After tax Operating Cash flow

Grey company holds an overdue note receivable of $800,000 plus recorded accrued interest of $64,000. the effective interest rate is 8%. as the result of a court-imposed settlement on december 31, year 3, grey agreed to the following restructuring arrangement: reduced the principal obligation to $600,000.forgave the $64,000 accrued interest.extended the maturity date to december 31, year 5.annual interest of $40,000 is to be paid to grey on december 31, year 4 and year 5. the present value of the interest and principal payments to be received by grey company discounted for two years at 8% is $585,734. grey does not elect the fair value option for reporting the debt modification. on december 31, year 3, grey would recognize a valuation allowance for impaired loans of