Based on the following information, Compute the transfer to Retained Earnings fo

Question

Based on the following information, Compute the transfer to Retained Earnings for Year 2006. Assume a tax rate of 34%. Year 2006 Sales $5150 Depreciation 577 COGS 1582 Operating Expenses 328 Interest 269 Cash 2107 A/R 2789 Short-term Notes Payable 407 Long-term Debt 7056 Net Fixed Assets 17669 A/P 2213 Inventory 4959 Dividends 690 Note: Enter your answer rounded off to two decimal points. Do not enter $ in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

Explanation / Answer

Sales = $5150

(-) COGS = $1582

(-) operating expense = $328

(-) depreciation expense = $577

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EBIT = $2663

(-) interest = $269

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EBT = $2394

(-) tax (0.34) = $813.96

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EAT = $1580.04

(-) dividends = $690

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retained earnings = $890.04

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