Wilma's Widgets had net sales of $ 20,882,696 in 2010. The cost of goods sold was $ 13,765,751, operating expenses (excluding depreciation) were $ 2,014,441, interest expenses were $ 663,090, depreciation expense was $ 1,221,755, and dividends paid were $ 452,135. The firm's tax rate is 35 percent. What did Wilma's Widgets report as earnings before interest and taxes (i. e., operating profit) in 2010

Question

Ashlyn Crawford

Business

8 January, 07:29

Wilma's Widgets had net sales of $ 20,882,696 in 2010. The cost of goods sold was $ 13,765,751, operating expenses (excluding depreciation) were $ 2,014,441, interest expenses were $ 663,090, depreciation expense was $ 1,221,755, and dividends paid were $ 452,135. The firm's tax rate is 35 percent. What did Wilma's Widgets report as earnings before interest and taxes (i. e., operating profit) in 2010

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Cedric Lambert · Answer 1

Wilma's Widgets will report $3,880,749.00 as earnings before interest and taxes (i. e., operating profit) in 2010

Explanation:

Earnings before interest and tax = net sales-cost of goods sold-operating expenses-depreciation

net sales is $20,882,696

cost of goods sold is $13,765,751

operating expenses are $2,014,441

depreciation is $1,221,755

earnings before interest and tax=$20,882,696 - $13,765,751 - $2,014,441-$1,221,755=$3,880,749.00