Question

You are given the following information for Ted’s Dread Co.: sales = $83,800; costs = $58,500; addition to retained earnings = $7,900; dividends paid = $3,440; interest expense = $3,150; tax rate = 22 percent. Calculate the depreciation expense for the company. (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

Answer 1

Sales	$            83,800
Costs	$            58,500
Depreciation [83800-58500-7602]	$              7,612
EBIT [14538+3150]	$            17,688
Interest expense	$              3,150
EBT [11340/78%]	$            14,538
Tax at 22% [14538*22%]	$              3,198
Net income	$            11,340
Dividends	$              3,440
Addition to retained earnings	$              7,900