Papa Roach Exterminators, Inc., has sales of $634,000, costs of $305,000, depreciation expense of $43,000, interest...

Papa Roach Exterminators, Inc., has sales of $634,000, costs of $305,000, depreciation expense of $43,000, interest expense of $29,000, and a tax rate of 30 percent. If the firm paid out $80,000 in cash dividends. What is the addition to retained earnings?

Expert Solution

To get the amount of money added to the retained earnings is simply 99,900 $.

This can be easily calculated by making the income statement of the company.

In the first step, we deduct the COGS (Cost of goods sold) from the sales to get the EBITDA/Gross profit, Considering that their are no SG&A expenses, EBITDA and gross profit is the sam in our case. After deducting the depreciation amount we get the EBIT. From which we further deduct the interest expense. When we reach to Pretax income, we have to simply deduct 30%(Taxes), to get the Net income.

Now, Net income is the final profit/income. It can be either distributed among the shareholders or reinvested in company through retained earnings.

Out of 179,900 Dollar net income, 80k is paid in dividends, the remaining is added to retained earning.

I hope this clears your doubt.

jeff jeffy answered 2 years ago

Papa Roach Exterminators, Inc., has sales of $694,000, costs of $235,000, depreciation expense of $42,000, interest...

Papa Roach Exterminators, Inc., has sales of $694,000, costs of $235,000, depreciation expense of $42,000, interest expense of $33,000, and a tax rate of 35 percent. The firm paid out $109,000 in cash dividends, and has 20,000 shares of common stock outstanding. (a) What is the earnings per share, or EPS, figure? (Click to select) (b) What is the dividends per share figure?

Billy's Exterminators, Inc., has sales of $817,000, costs of $343,000, depreciation expense of $51,000, interest expense...

Billy's Exterminators, Inc., has sales of $817,000, costs of $343,000, depreciation expense of $51,000, interest expense of $38,000, and a tax rate of 21 percent. The firm just paid out $95,000 in cash dividends. The company has 90,000 shares of common stock outstanding. What is the earnings per share, or EPS, figure? What is the dividends per share?

Kamenka LLC has sales of 634,000, costs of 305,000, depreciation expense of 46,000, interest expense of...

Kamenka LLC has sales of 634,000, costs of 305,000, depreciation expense of 46,000, interest expense of 29,000 and tax rate of 35%, what is its net income? Suppose it paid dividends of 86,000, what was the addition to the retained earnings?

Ziggy Inc., has sales of $817,000 costs of $343,000, depreciation expense of $51,000, interest expense of...

Ziggy Inc., has sales of $817,000 costs of $343,000, depreciation expense of $51,000, interest expense of $38,000 and tax rate of 35%. What is the net income of the firm? Suppose the firm paid out $95,000 in cash dividends. What is the addition to retained earnings? Suppose the firm had 90,000 shares of common stock outstanding. What is the earnings per share? What is the dividends per share figure?

ABC Inc. has sales of $44,500, costs of $19,400, depreciation expense of $2,900, and interest expense...

ABC Inc. has sales of $44,500, costs of $19,400, depreciation expense of $2,900, and interest expense of $2,400. If the tax rate is 35%, what is the operating cash flow, or OCF? (Omit $ sign in your response.)

Hammett, Inc., has sales of $19,630, costs of $9,400, depreciation expense of $2,070, and interest expense...

Hammett, Inc., has sales of $19,630, costs of $9,400, depreciation expense of $2,070, and interest expense of $1,560. Assume the tax rate is 30 percent. (Enter your answer as directed, but do not round intermediate calculations.) Required: What is the operating cash flow? Operating cash flow

Benson, Inc., has sales of $39,230, costs of $12,930, depreciation expense of $2,630, and interest expense...

Benson, Inc., has sales of $39,230, costs of $12,930, depreciation expense of $2,630, and interest expense of $1,910. The tax rate is 22 percent. What is the operating cash flow, or OCF? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

A company has sales of $50,000, costs of $23,000, depreciation expense of $2,000, and interest expense...

A company has sales of $50,000, costs of $23,000, depreciation expense of $2,000, and interest expense of $1,500. If the tax rate is 21%, what is the operating cash flow, OCF?

Company ZYX has sales of $664000, costs of $255000, depreciation expense of $45000, interest expense of...

Company ZYX has sales of $664000, costs of $255000, depreciation expense of $45000, interest expense of $31000, and a tax rate of 30.00%. The firm paid out $108000 in cash dividends, and has 30,000 shares of common stock outstanding. What is the earnings per share (EPS) and dividends per share (DPS)? A. $7.77 and $3.60 B. $9.01 and $4.15 C. $8.65 and $3.60 D. $7.77 and $4.80

XYZ Inc., has sales of $800,000, costs of $375,000, depreciation expense of $85,000, interest expense of $50,000, and a tax rate of 35%.

XYZ Inc., has sales of $800,000, costs of $375,000, depreciation expense of $85,000, interest expense of $50,000, and a tax rate of 35%. What is the net income of this firm? (10 Points)The income statement for the company is(Use Excel and Excel Formulas to answer)

Question