You are given the following information for Gandolfino Pizza Co.: sales = $48,00

Question

You are given the following information for Gandolfino Pizza Co.: sales = $48,000; costs = $21,200; addition to retained earnings = $6,500; dividends paid = $1,300; interest expense = $5,200; tax rate = 35 percent. Calculate the depreciation expense.

You are given the following information for Gandolfino Pizza Co.: sales = $48,000; costs = $21,200; addition to retained earnings = $6,500; dividends paid = $1,300; interest expense = $5,200; tax rate = 35 percent. Calculate the depreciation expense.

Explanation / Answer

Ans $ 9600 Addition to retain earning $    6,500 Add Dividend paid $    1,300 Net Income $    7,800 Tax 35% (on Net Income before) $    4,200 *7800/.65*.35 Net Income before tax $ 12,000 Add Interest Exp $    5,200 Depreciation $    9,600 ? Balance amount Gross profit $ 26,800 Cost $ 21,200 Sales $ 48,000

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