Problem 33 Income Statement Pearson Brothers recently report

Problem 3-3 Income Statement Pearson Brothers recently reported an EBITDA of $13.5 million and net income of $3.9 million. It had $2.0 million of interest expense, and its corporate tax rate was 35%, what was its charge for depreciation and amortization? Write out your answer completely. For example, 25 million should be entered as 25,000,000. Round your answer to the nearest dollar, if necessary

Solution

Dear Student Thank you for using Chegg Please find below the answer Statementshowing Computations Paticulars Amount EBITDA         13,500,000.00 Net Income           3,900,000.00 Add Tax at 35% = 3900,000/(1-.35)*.35           2,100,000.00 Income before tax           6,000,000.00 Add Interest Expense           2,000,000.00 EBIT           8,000,000.00 `Depreciation and amortisation = EBITDA-EBIT = 13.5m - 8m           5,500,000.00