Elias Corporation, has sales of $326,500, 

cost of sales of $158,000, 

depreciation expense of $26,000, 

a tax rate of 30 percent. 

The company also carries $250,000 of debt and paid 5% interest on the loan for the year.  

What is the net income for this firm? 

 If the firm decides to distribute 60% of the firm's net income as dividends, what is the addition to retained earnings for that year?

 

Please show work (what formula you used) and fill chart on bottom: 

Transcribed Image Text:

Sales Cost of sales Depreciation Interest Long Term Debt Tax rate Interest rate Payout ratio GP Net income Additions to retained earnings $0 Sales Cost of sales Depreciation Interest Long Term Debt Tax rate Interest rate Payout ratio GP Net income Additions to retained earnings $0

Answer rating: 100% (QA)

Operating Income EBIT Earnings Before Interest and Taxes Operating Income Sales Cost of Sales Deprec... View the full answer