During the year just ended, Spriha’s distribution had pretax earnings from operations of $2,290,000. In addition, during the year it received $50,000 in income from interest on bonds & received $88,000 in income from dividend on common stock holding in Microsoft. Spriha’s distribution company is in the 40% tax bracket & is eligible for 80% dividend exclusion. *Interest income received by the company is treated as ordinary income. a. Find the tax and after-tax amount attributable to the interest income. b. Find the tax and after-tax amount attributable to the dividend income.

During the year just ended, Spriha’s distribution had pretax earnings from operations of $2,290,000. In addition, during the year it received $50,000 in income from interest on bonds & received $88,000 in income from dividend on common stock holding in Microsoft. Spriha’s distribution company is in the 40% tax bracket & is eligible for 80% dividend exclusion. *Interest income received by the company is treated as ordinary income. a. Find the tax and after-tax amount attributable to the interest income. b. Find the tax and after-tax amount attributable to the dividend income.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter2: The Domestic And International Financial Marketplace

Section2.A: Taxes

Problem 2P

See similar textbooks

Similar questions

During the year just ended, Spriha’s distribution had pretax earnings from operations of $2,290,000. In addition, during the year it received $150,000 in income from interest on bonds & received $88,000 in income from dividend on common stock holding in Microsoft. Spriha’s distribution company is in the 40% tax bracket & is eligible for 70% dividend exclusion.*Interest income received by the company is treated as ordinary income. a. Find the tax and after-tax amount attributable to the interest income.b. Find the tax and after-tax amount attributable to the dividend income
For the year just ended, ThruCast Corp. had pretax earnings from operations of $1.25 million. In addition, it received $110,000 in interest income from bonds it held in XrayTech and it received $65,000 in dividend income from its 8% common stock holding in Books-R-Us Corp. What is the total tax liability for ThruCast Corp. for the year? $299,114 $239,400 $292,425 $262,500
Determine how much of the distribution is taxed as dividend income and how much is a return of capital. The IB corp has accumulated E&P of $20000 on 1/1/20xx. During the year there is a deficit in E &P of $30000 earned evenly through out the year. On July 1, of 20xx BI corp. Distributes $12000 in cash to Maximo it's only shareholder.
. Franton Company, a calendar year, accrual basis corporation, reported $2,076,000 net income after tax on its current year financial statements prepared in accordance with GAAP. The corporation's financial records reveal the following information. Federal tax expense per books was $660,000. Franton received $22,400 of dividends from its < 1% investment in Microsoft and General Motors stock. Bad debt expense was $12,900, and write-offs of uncollectible accounts receivable totaled $16,300. Book depreciation was $110,890, and MACRS depreciation was $94,700. Franton paid a $50,000 fine to the City of Albany for illegal trash dumping. Compute Franton's regular tax liability. Hint: The correct answer should be $585,394
help
The following information relates to the operations of Branded Ltd. The net profit after tax was $1,000,000. The company distributed ordinary dividends of $600,000 to its shareholders. Over the year, weighted average number of ordinary shares were 2,000,000. Ordinary shares are currently selling for $8.00 per share. What is the earning per share for the company? 0.20. 0.33. 0.40. 0.50.
(Corporate income tax) Sales for J. P. Hulett Inc. during the past year amounted to $4.4 million. Gross profits totaled $1.08 million, and operating and depreciation expenses were $507,000 and $359,000, respectively. Dividend income for the year was $14,000, which was paid by a firm in which Hulett owns 85 percent of the shares. Use the corporate tax rates shown in the popup window, LOADING…, to Comcute the corporation's tax liability. What are the firm's average and marginal tax rates?
Stock in Random Corporation is owned equally by two individual shareholders. During the current year, Random reports the following results: Income Rentals: $200,000 Dividend (from a 25% owned domestic corporation): 30,000 Taxable interest: 15,000 Short-term capital gains: 3,000 Long-term capital gains: 17,000 Expenses related to rental income Interest: $30,000 Depreciation: 32,000 Property taxes: 11,000 Other Sec. 162 expenses: 50,000 General and administrative expenses: 10,000 Dividend paid on June 30: 15,000 What changes can management make to reduce the corporation’s PHC exposure in future years?
(Corporate income tax) Sales for J. P. Hulett Inc. during the past year amounted to $4.4 million. Gross profits totaled $1.01 million, and operating and depreciation expenses were $502,000 and $345,000, respectively. Dividend income for the year was $11,000, which was paid by a firm in which Hulett owns 85 percent of the shares. Use the corporate tax rates shown in the popup window, E, to Comcute the corporation's tax liability. What are the firm's average and marginal tax rates? The firm's tax liability for the year is $. (Round to the nearest dollar.) Data table Taxable Income $0-$50,000 $50,001 - $75,000 $75,001 - $100,000 $100,001 - $335,000 $335,001 - $10,000,000 Marginal Tax Rate 15% 25% 34% 39% 34% 35% 38% $10,000,001 - $15,000,000 $15,000,001 - $18,333,333 Over $18,333,333 35% (Click on the icon in order to copy its contents into a spreadsheet.) X
(Corporate income tax) Sales for J. P. Hulett Inc. during the past year amounted to $3.5 million. Gross profits totaled $1.01 million, and operating and depreciation expenses were $494,000 and $347,000, respectively. Dividend income for the year was $13,000, which was paid by a firm in which Hulett owns 85 percent of the shares. Use the corporate tax rates shown in the popup window, to Comcute the corporation's tax liability. What are the firm's average and marginal tax rates? The firm's tax liability for the year is $. (Round to the nearest dollar.) The firm's average tax rate is%. (Round to two decimal places.) The firm's marginal tax rate is %. (Round to the nearest integer.) 3 E D C 80 $ 4 R F DOD 000 F4 V % 5 T FS B A 6 Y MacBook Air F6 H & 7 N Data table Marginal Tax Rate 15% 25% 34% 39% $335,001-$10,000,000 34% $10,000,001-$15,000,000 35% $15,000,001-$18,333,333 38% Over $18,333,333 35% (Click on the icon in order to copy its contents into a spreadsheet.) 44 F7 D J * 8 Taxable…
Accounting Stock in Random Corporation is owned equally by two individual shareholders. During the current year, Random reports the following results: Income Rentals: $200,000 Dividend (from a 25% owned domestic corporation): 30,000 Taxable interest: 15,000 Short-term capital gains: 3,000 Long-term capital gains: 17,000 Expenses related to rental income Interest: $30,000 Depreciation: 32,000 Property taxes: 11,000 Other Sec. 162 expenses: 50,000 General and administrative expenses: 10,000 Dividend paid on June 30: 15,000 adjusted ordinary gross income?
Edna Recording Studios, Inc., reported earnings available to common stock of $4,000,000 last year. From those earnings, the company paid a dividend of $1.17 on each of its 1,000,000 common shares outstanding. The capital structure of the company includes 35% debt, 25% preferred stock, and 40% common stock. It is taxed at a rate of 21%. a. If the market price of the common stock is $39 and dividends are expected to grow at a rate of 6% per year for the foreseeable future, what is the company's cost of retained earnings financing? b. If underpricing and flotation costs on new shares of common stock amount to $9 per share, what is the company's cost of new common stock financing? c. The company can issue $2.12 dividend preferred stock for a market price of $35 per share. Flotation costs would amount to $5 per share. What is the cost of preferred stock financing?