The following financial information is available for Hero Sports Ltd.: Sales : $45,000 Costs : $25,000 Addition to retained earnings : $5,500 Dividends paid : $900 Interest expense : $1,450 Tax rate : 40% -Compute the depreciation expense. PLEASE SHOW THE WORKING TYPED OUT SO I CAN UNDERSTAND THE STEPS. NO SPREADSHEETS
The following financial information is available for Hero Sports Ltd.: Sales : $45,000 Costs : $25,000 Addition to retained earnings : $5,500 Dividends paid : $900 Interest expense : $1,450 Tax rate : 40% -Compute the depreciation expense. PLEASE SHOW THE WORKING TYPED OUT SO I CAN UNDERSTAND THE STEPS. NO SPREADSHEETS
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
The following financial information is available for Hero Sports Ltd.:
Sales : $45,000
Costs : $25,000
Addition to
Dividends paid : $900
Interest expense : $1,450
Tax rate : 40%
-Compute the
PLEASE SHOW THE WORKING TYPED OUT SO I CAN UNDERSTAND THE STEPS. NO SPREADSHEETS
Expert Solution
Step 1: Formulas.
1.Gross profit = Sales - Costs
2.Gross profit - Depreciation - Interest = Earnings before tax
3.Net Income = Earnings before tax * (1-tax rate)
4.Net Income - Dividend = Addition to retained earnings
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