You are given the following information for Sookie’s Cookies Co.: sales = $51,200; costs = $39,600; addition to retained earnings = $2,320; dividends paid = $935; interest expense = $1,560; tax rate = 40 percent. (Enter your answer as directed, but do not round intermediate calculations.)
Calculate the net income.
Calculate the taxable income.
Calculate the EBIT.
Calculate the depreciation expense.
Solution
a.Net Income = 2320 + 935 = 3255
b. Taxbale Income (X): X*(1-0.4) = 3255 , So X = 3255/0.6 = 5,425. Hence taxable income = $5,425
c.So EBIT = Sales - Costs = 51,200 - 39,600 = $11,600
d.Derirciation Expense : 11600 -1560 - Dep. Expense = 5425 . Hence depreciation expense = $4,615
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Asian American Pacific Islander Month DDSD 2024.pptx
You are given the following information for Sookies Cookies Co-- sales.docx
1. You are given the following information for Sookie’s Cookies Co.: sales = $51,200; costs =
$39,600; addition to retained earnings = $2,320; dividends paid = $935; interest expense =
$1,560; tax rate = 40 percent. (Enter your answer as directed, but do not round intermediate
calculations.)
Calculate the net income.
Calculate the taxable income.
Calculate the EBIT.
Calculate the depreciation expense.
You are given the following information for Sookie’s Cookies Co.: sales = $51,200; costs =
$39,600; addition to retained earnings = $2,320; dividends paid = $935; interest expense =
$1,560; tax rate = 40 percent. (Enter your answer as directed, but do not round intermediate
calculations.)
Solution
a.Net Income = 2320 + 935 = 3255
b. Taxbale Income (X): X*(1-0.4) = 3255 , So X = 3255/0.6 = 5,425. Hence taxable income =
$5,425
c.So EBIT = Sales - Costs = 51,200 - 39,600 = $11,600
d.Derirciation Expense : 11600 -1560 - Dep. Expense = 5425 . Hence depreciation expense =
$4,615
