Griffin's Goat Farm, Inc., has sales of $796,000, costs of $327,000, depreciation expense of $42,000, interest expense of $34,000, a tax rate of 21 percent, and paid out $95,000 in cash dividends. What is the addition to retained earnings

Question

Fiona Glover

Business

30 August, 01:14

Griffin's Goat Farm, Inc., has sales of $796,000, costs of $327,000, depreciation expense of $42,000, interest expense of $34,000, a tax rate of 21 percent, and paid out $95,000 in cash dividends. What is the addition to retained earnings

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Julio · Answer 1

The addition to retained earnings is 310,470.

Explanation:

Total Addition to retained earning is net income for the period.

Subtract all the expenses from sales value to reach at net income value.

Sales $796,000

Costs ($327,000)

Depreciation expense $42,000)

Interest expense ($34,000)

Income before tax $393,000

Tax rate 21 %, $82,530

Net Income $310,470

Addition to Retained Earning is $310,470