Sunland Company is a merchandising firm. Last year the company reported sales of $676000 and cost of goods sold of $404600. The
1 answer:
You might be interested in
Answer:
Cost of Goods Sold is = $697213.44
Explanation:
given data
depreciation expenses = $28,900
sales = $755,000
retained earnings = $10,200
paid interest = $6,200
dividends = $5,000
tax rate = 33 percent
solution
first we get here EBIT that is express as here
EBIT = Earnings for equity holders + Tax + Interest ...............1
Earnings for equity holders = Dividend Paid + retained earnings
Earnings for equity holders = $5,000 + $10,200 = $15200
here Tax is = × 33 = 7486.56
so here EBIT = $15200 + $7486.56 + $6,200
EBIT = $28886.56
so Cost of Goods Sold is = sales - depreciation - EBIT ..................2
Cost of Goods Sold is = $755,000 - $28,900 - $28886.56
Cost of Goods Sold is = $697213.44