You are given the following information for Gandolfino Pizza Co.: sales = $54,00

Question

You are given the following information for Gandolfino Pizza Co.: sales = $54,000; costs = $22,900; addition to retained earnings = $8,500; dividends paid = $3,200; interest expense = $5,300; tax rate = 35 percent. Calculate the depreciation expense. (Do not round intermediate calculations and round your final answer to nearest whole dollar amount.)

You are given the following information for Gandolfino Pizza Co.: sales = $54,000; costs = $22,900; addition to retained earnings = $8,500; dividends paid = $3,200; interest expense = $5,300; tax rate = 35 percent. Calculate the depreciation expense. (Do not round intermediate calculations and round your final answer to nearest whole dollar amount.)

Explanation / Answer

Statement showing Computations Particulars Amount Sales                 54,000.00 Costs                 22,900.00 Income before depreciation                 31,100.00 Addition to retained Earnings                    8,500.00 Dividends Paid                    3,200.00 Income after Tax                 11,700.00 Tax rate   35% Income Before Tax = 11700/.65                 18,000.00 Interest Expense                    5,300.00 EBIT or income after Depreciation                 23,300.00 Depreciation = 31,100 - 23,300                    7,800.00

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