AV Sales has net revenue of $513,000 and costs of $406,800. The depreciation expense is $43,800, interest paid is $11,200, and dividends for the year are$4,500. The tax rate is 33 percent. What is the addition to retained earnings?

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Business

Broderick

13 April, 20:48

AV Sales has net revenue of $513,000 and costs of $406,800. The depreciation expense is $43,800, interest paid is $11,200, and dividends for the year are$4,500. The tax rate is 33 percent. What is the addition to retained earnings?

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Yael Golden · Answer 1

addition to retained earnings is $34,304

Explanation:

Revenue = $513,000

- Costs = $406,800

Gross Profit = $106200

- Depreciation expense = $43,800

- Interest paid = $11,200

Profit before tax = $51,200

- Tax 33% = $16,896

Profit after tax = $34,304

*Profit after tax is actually addition to Retained earning the dividend payment is made from the Retained earning account after that.