Determining taxable income you?

Question

which items do you add or subtract towards the Cost og goods sold: interest, dividends, depreciation, change in retained earnings

thanks in advance

Answer 1

The formula for Cost of Goods Sold is: Beginning Inventory + Purchases - Ending Inventory = Cost of Goods Sold.

You then subtract CGS from Net Receipts (Gross Receipts less Returns and Allowances) to arrive at Gross Profit.

Then you add up your operating expenses -- rent, utilities, payroll & payroll taxes, depreciation, vehicle expenses, contract labor, interest expenses, bank charges & fees, advertising, etc. and subtract the total from Gross Profit to arrive at Net Income from Operations.

Finally you add any non-operating income items such as interest income to arrive at Net Profit.

Net Profit is what you are taxed on.

Answer 2

None of those apply to Cost of Goods Sold