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Income statement: The Centennial Chemical Corp
Income statement: The Centennial Chemical Corp. announced that, for the period ending March 31, 2011, it had earned income after taxes worth $2,768,028.25 on revenues of $13,144,680. The company's costs (excluding depreciation and amortization) amounted to 61 percent of sales and it had interest expenses of $392,168. What is the firm's depreciation and amortization expense if its tax rate was 34 percent?
Expert Solution
| Income Statement: | ||
| Particulars | Amount | |
| Revenues | $ 1,31,44,680.00 | |
| Less: Operating Expenses | $ 80,18,254.80 | =13144680*61% |
| Operating Profit | $ 51,26,425.20 | =13144680-8018254.80 |
| Less: Depreciation and Amortization Expenses | $ 5,40,275.00 | =5126425.20-4586150.20 |
| Profit before Interest and Taxes | $ 45,86,150.20 | =392168+4193982.20 |
| Less: Interest Expenses | $ 3,92,168.00 | |
| Profit before Taxes | $ 41,93,982.20 | =2768028.25/(1-34%) |
| Less: Taxes | $ 14,25,953.95 | =4193982.20*34% |
| Profit after Taxes or Net Income | $ 27,68,028.25 |
So, Depreciation and Amortization Expenses for the Year is 540,275.
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