Last year,The Pizza Joint added $4,100 to retained earnings from sales of $93,600.The company had costs of $74,400,dividends of $2,500,and interest paid of $1,400.The tax rate was 34 percent.What was the amount of the depreciation expense?

Question

Quizplus · Accepted Answer

Earnings before interest and taxes = [($4,100 + $2,500)/(1 - 0.34)] + $1,400 = $11,400; Depreciation = $93,600 - $74,400 - $11,400 = $7,800

Last Year,The Pizza Joint Added $4,100 to Retained Earnings from Sales