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
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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
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