Question

I am having a problem figuring out this problem. I understand the concept of depreciation and it occurs on non cash items over a period of time. However, there are no cash items to depreciate in this problem.

Given the following information for O'Hara Marine Co, calculate the depreciation expense:
Sales=$43000; costs=$27500; addition to retained earnings=$5300; dividends paid=$1530; interest expense=$1900; tax rate=35 percent.

Is there anyone that can point me in the right direction? Thanks

Answer 1

Balance the books, you will be left with a depreciation expense entry.

Answer 2

Thank you Bob...Does that work the same for an income statement too?