Question

Gia, Inc., has sales of $679,000, costs of $341,000, depreciation expense of $85,000, interest expense of $52,500, and a tax rate of 22 percent. (Do not round intermediate calculations.) What is the net income for the firm? Suppose the company paid out $40,500 in cash dividends. What is the addition to retained earnings?

Answer 1

Net Income $156,390

Addition to Retained Earnings $115,890

Step-by-step explanation:

Income Statement

Sales $679,000

Cost of goods sold -$341,000

Depreciation Expenses -$85,000

Gross Profit $253,000

Interest Expenses -$52,500

Net Income BEFORE Taxes $200,500

Tax RATE 22% -$44,110

Net Income $156,390

Dividens -$40,500

Retained Earnings $ 115,890