Question

Griffin's Goat Farm, Inc., has sales of $672,000, costs of $334,000, depreciation expense of $78,000, interest expense of $49,000, a tax rate of 25 percent, and paid out $44,000 in cash dividends. What is the addition to retained earnings? (Do not round intermediate calculations.) Addition to retained earnings

Answer 1

CALCULATION OF THE ADDITTION TO RETAINED EARNING
PARTICULARS	AMOUNT
Sales	$                  6,72,000
Less: Expenses
Costs	$                  3,34,000
Depreciation expenses	$                      78,000
Earning before taxes & interest	$                  2,60,000
Interest Expenses	$                      49,000
Earning After interest before taxes	$                  2,11,000
Less: Tax @ 25%	$                      52,750
Net Income	$                  1,58,250
Less: Dividend Paid	$                      44,000
Addittion to retained earnings	$                  1,14,250
Answer = $ 114,250