Hayes Bakery has sales of $30,600, costs of $15,350, an addition to retained earnings of $4,221, dividends paid of $469, interest expense of $1,300, and a tax rate of 21 percent. What is the amount of the depreciation expense?

Question

Quizplus · Accepted Answer

To find the depreciation expense, we need to use the following formula:

Net Income = Sales - Costs - Depreciation - Interest - Taxes

Rearranging this formula to solve for depreciation, we get:

Depreciation = Sales - Costs - Interest - Taxes - Net Income

Plugging in the given values, we get:

Depreciation = $30,600 - $15,350 - $1,300 - (21% x ($30,600 - $15,350 - $1,300 - $469)) - $4,221

Depreciation = $8,013.29

Therefore, the answer is C, $8,013.29.

Hayes Bakery Has Sales of $30,600, Costs of $15,350, an Addition