ou have been given the following information for Moore’s HoneyBee Corp.: Net sales = $44,000,000.Gross profit = $19,400,000.Other operating expenses = $3,400,000.Addition to retained earnings = $8,328,000.Dividends paid to preferred and common stockholders = $2,100,000.Depreciation expense = $2,000,000. The firm’s tax rate is 21 percent. The firm's interest expense is all tax deductible.Calculate the cost of goods sold and the interest expense for Moore’s HoneyBee Corp. (Round your answers to the nearest dollar amount.)   Cost of goods sold Interest expense

Question
Asked Aug 29, 2019
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ou have been given the following information for Moore’s HoneyBee Corp.:
 

  1. Net sales = $44,000,000.

  2. Gross profit = $19,400,000.

  3. Other operating expenses = $3,400,000.

  4. Addition to retained earnings = $8,328,000.

  5. Dividends paid to preferred and common stockholders = $2,100,000.

  6. Depreciation expense = $2,000,000.

 
The firm’s tax rate is 21 percent. The firm's interest expense is all tax deductible.

Calculate the cost of goods sold and the interest expense for Moore’s HoneyBee Corp. (Round your answers to the nearest dollar amount.)

 
 
 
Cost of goods sold  
Interest expense  
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Expert Answer

Step 1

Recall the mathematical equation:

Gross Profit = Net Sales - Cost of Goods sold

Hence, 19,400,000 = 44,000,000 - Cost of Goods sold

Hence, Cost of Goods sold = 44,000,000 - 19,400,000 = $ 24,600,000

Step 2

Recall the fundamental equation of accounting of net income:

Net income = Addition to retained earnings + Dividends paid to preferred and common stockholders =(Gross Profit - Other Operating expenses - Depreciaton - Interest) x (1 - Tax rat...

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