Winston Industries had sales of $843,800 and costs of $609,900.The firm paid $38,200 in interest and $18,000 in dividends.It also increased retained earnings by $62,138 for the year.The depreciation was $76,400.What is the average tax rate?

Question

Quizplus · Accepted Answer

Earnings before taxes = $843,800 - $609,900 - $76,400 - $38,200 = $119,300Net income = $18,000 + $62,138 = $80,138Taxes = $119,300 - $80,138 = $39,162Tax rate = $39,162/$119,300 = 32.83 percent

Winston Industries Had Sales of $843,800 and Costs of $609,900