Density Farms, Inc. had sales of $510,000, cost of goods sold of $180,000, selling and administrative expense of $68,000, and operating profit of $97,000.
What was the value of depreciation expense?
Answer and Explanation:
The calculated value of the depreciation expense is option a. $165,000.
The value of the depreciation expense is given by:
- = Sales - (cost of goods sold + selling and administrative expenses) - operating profit
- = $510,000 - ($180,000 + $68,000) - $97,000
- = $510,000 - $248,000 - $97,000
- = $165,000
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from Financial Accounting: Help and ReviewChapter 5 / Lesson 14
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