How do I get the depreciation expense based on this information: sales = $51,700; costs = $39,100; addition to retained earnings = $2,925; dividends paid = $960; interest expense = $1,510; tax rate = 30 percent
To calculate the depreciation expense, you need additional information that is not provided in the given information. The depreciation expense is typically determined based on the cost and useful life of the assets owned by a company.
To calculate the depreciation expense, you will need the following details:
1. Cost of the asset: This refers to the initial purchase price or cost of the asset. If this information is not provided, you may need to refer to the company's financial statements or other sources to obtain the cost of the asset.
2. Useful life of the asset: This refers to the estimated duration or period over which the asset is expected to be used. It can be expressed in years or any other unit of time.
3. Residual or salvage value: This refers to the estimated value of the asset at the end of its useful life. It represents the amount the company expects to receive when the asset is disposed of or no longer in use.
Once you have obtained the above information, you can use one of the common methods to calculate depreciation, such as the straight-line method or the declining balance method.
Here's a step-by-step breakdown of how to calculate depreciation using the straight-line method:
1. Determine the cost of the asset.
2. Subtract the residual value from the cost to calculate the depreciable base (cost - residual value).
3. Divide the depreciable base by the useful life of the asset to determine the annual depreciation expense (depreciable base / useful life).
If you have the necessary details, you can provide them to get a more accurate calculation.