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A restaurant chain had $684,000 worth of sales revenue last year. It also had costs of...

A restaurant chain had $684,000 worth of sales revenue last year. It also had costs of $315,000, depreciation expense on its equipment of $42,000, interest expense of $35,000, and a corporate income tax rate of 35 percent. The restaurant chain paid out $78,000 in cash dividends. Calculate the restaurant chain's addition to retained earnings for the year?

Multiple Choice

$111,800

$153,800

$100,620

$188,800

$146,800

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Answer #1
Sales 684000
Less:costs (315000)
Less:depreciation expense (42000)
EBIT 327000
Less:interest (35000)
EBT 292000
Less:tax(292000*35%) (102200)
Net income $189800
Less:cash dividends (78000)
Addition to retained earnings $111,800.
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