1. You are given the following information for Gandolfino Pizza Co.: sales = $42,000; costs = $22,200; addition to retained earnings = $5,350; dividends paid = $1,800; interest expense = $4,600; tax rate = 35 percent. Calculate the depreciation expense. (Do not round intermediate calculations and round your final answer to nearest whole dollar amount.
2. Red Hawk, Inc., is obligated to pay its creditors $7,100 during the year. What is the market value of the shareholders’ equity if assets have a market value of $8,750? What is the market value of the shareholders’ equity if assets equal $6,500?