Papa Roach Exterminators, Inc., has sales of $699,000, costs of $385,000, depreciation expense of $47,000, interest expense of $25,000, and a tax rate of 30 percent. If the firm paid out $80,000 in cash dividends. What is the addition to retained earnings?

Question

Business

Ryland Schroeder

11 January, 17:00

Papa Roach Exterminators, Inc., has sales of $699,000, costs of $385,000, depreciation expense of $47,000, interest expense of $25,000, and a tax rate of 30 percent. If the firm paid out $80,000 in cash dividends. What is the addition to retained earnings?

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Jenny Esparza · Answer 1

The addition to retainer earnings is $ 169400.

Explanation:

note: $ 699000 - $385000 - $47000 - $ 25000 = $ 242000

addtion to the retainer earnings = $ 699000 - $385000 - $47000 - $ 25000 - 30%*242000

= $ 169400

Therefore, the addition to retainer earnings is $ 169400.