Hunt Taxidermy. Incorporated, is concerned about the taxes paid by the company. In addition to $4.3 million of taxable income, the firmreceived $304,000 of interest on state-issued bonds and $140,000 of dividends on common stock. It owns in Oakdale Fashions,Incorporated. (Use corporate tax rate of 21 percent for your calculations.)Calculate Hunt Taxidermy's tax liability.Note: Enter your answer in dollars not in millions.Average tax rate$Calculate Hunt Taxidermy's average tax rate.995,040Marginal tax rateCalculate Hunt Taxidermy's marginal tax rate.21 %

Hunt Taxidermy, Incorporated, a prominent player in the industry, seeks clarity regarding its tax…

Answered: Hunt Taxidermy. Incorporated, is…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Hunt Taxidermy, Inc., is concerned about the taxes paid by the company in 2021. In addition to $7.5 million of taxable income, the firm received $614,000 of interest on state-issued bonds and $340,000 of dividends on common stock it owns in Oakdale Fashions, Inc. (Use corporate tax rate of 21 percent for your calculations.) Calculate Hunt Taxidermy’s tax liability. (Enter your answer in dollars not in millions. Round your answer to the nearest dollar amount.) Calculate Hunt Taxidermy’s average tax rate. (Round your answer to 2 decimal places.) Calculate Hunt Taxidermy’s marginal tax rate.
ACME Partnership, a consulting firm, has had the following gross receipts since its formation: $22,800,000 in year 1, $24,600,000 in year 2, $33,800,000 in year 3 and $31,700,000 in year 4. ACME is not a tax shelter. Assume the gross receipts threshold for Year 3 is $25,000,000 and Year 4 is $27,000,000. In which tax years must ACME start using the accrual method? A) Year 3 if none of the partners is a C corporation. B) Year 4 if none of the partners is a C corporation. C) Year 3 if one of the partners is a C corporation. D) Year 4 if one of the partners is a C corporation.
The B/S and I/S for Company ABC are below. At the beginning of year 1, all B/S items are zero except for a Factory, that begins year 1 at 200,000. All inventory is sold by the end of each year (EOY), but some sales and some expenses are “on account”. EBT for tax purposes is the same as the EBT on the Income Statement. Corporate taxes are 21%, and are paid in cash at EOY. All cash the company has at EOY is paid as cash dividends to shareholders. Calculate the dividends issued by the company each of the four years. End Of Yr1 EOY 2 EOY 3 EOY 4 Balance Sheet (B/S) Accounts Receivable 5,000 15,000 15,000 10,000 Accounts Payable 4,000 6,000 8,000 10,000 Cash 0 0 0 0 Factory 175,000 150,000 125,000 100,000 Income Statement (I/S) Revenues 190,000 200,000 200,000 200,000 COGS + SG&A (110,000) (90,000) (70,000) (50,000) Depreciation…
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Dengar
Urgent Need (Explanation Require) Multiple Choice Questions. 1. Similar to the example given in class, assume that a corporation has $500 of cash revenue and $300 of cash expenses. Therefore the corporation has $200 of taxable income. The corporation pays taxes at the 40% income tax rate (i.e., all of the $200 of taxable income will be taxed at 40%). The corporation plans to pay any cash left over after the payment of income taxes to the stockholders. If the stockholders pay taxes at the 20% tax rate (i.e., any dividends they receive will be taxed at 20%), how much income tax (both corporate and individual) will be paid? A. $82 B. $104 C. $112 D. $116 E. $120 F. $140 2. A project requires an initial investment of $10 million and produces a single positive cash flow in one year. The opportunity cost of capital for the project is 8%. The expected return for the project is X%. Which of the following statements is true? A. The project will create value for the owner only if the expected…
Calculate the amount of corporate income tax due and the net income after taxes for the following corporations. Name Taxable Income Tax Liability Net Income after Taxes 20. All City Plumbing, Inc. $352,100 $73,941 $278,159 21. Universal Holdings, Inc. $88,955 $18,680.55 $70,274.45 22. Evergreen Corp. $14,550,000 blank 3 blank 4 23. Bioscience Labs, Inc. $955,000,000 $200,550,000 $754,450,000
XYZ is a calendar-year corporation that began business on January 1, 2021. For the year, it reported the following information in its current-year audited income statement. Notes with important tax information are provided below. XYZ corporation Income statement For current year Book Income Revenue from sales $ 40,000,000 Cost of Goods Sold (27,000,000) Gross profit $ 13,000,000 Other income: Income from investment in corporate stock 300,0001 Interest income 20,0002 Capital gains (losses) (4,000) Gain or loss from disposition of fixed assets 3,0003 Miscellaneous income 50,000 Gross Income $ 13,369,000 Expenses: Compensation (7,500,000)4 Stock option compensation (200,000)5 Advertising (1,350,000) Repairs and Maintenance (75,000) Rent (22,000) Bad Debt expense (41,000)6 Depreciation (1,400,000)7 Warranty expenses (70,000)8 Charitable donations (500,000)9 Meals (all at restaurants) (18,000) Goodwill impairment (30,000)10…
2
Birdcallington Ltd. is a CCPC that earns $200,000 in active taxable income in 2014, all of which is earned within Canada. Calculate their taxes owing assuming that no corporations are associated with them and provincial taxes are 8% on all forms of income. (ensure you use the long form method - including showing the small business deduction, generate rate reduction, etc. if relevant).
Rourke Enterprises is owned by Dallas. For the year, Rourke had net income per books of $450,000. This included the following items: Federal income tax expense $125,000 Bad Debt Expense1 $80,000 Rent $50,000 Meals $45,000 Depreciation expense2 $105,000 Dividends3 $50,000 1 This was calculated using the allowance method. Using specific write-off, this would have been $50,000. 2 Sum-of-the-years-digits method was used for book purposes. Had MACRS been used, depreciation expense would have been $125,000. Had straight-line been used, depreciation would have been $95,000. 3 These dividends were from Mavis, Inc. Jiminy owns 75% of Jepeto. During the year, Rourke pays Dallas distribution of $500,000. Dallas has a basis of $600,000 in her stock. What are the tax consequences of the distribution to Dallas? What basis will…
Hank started a new business, Hank's Donut World (HW for short), in June of last year. He has requested your advice on the following specific tax matters associated with HW's first year of operations. Hank has estimated HW's income for the first year as follows: Revenue: Donut sales Catering revenues Expenditures: Donut supplies Catering expense Salaries to shop employees Rent expense Accident insurance premiums Other business expenditures Net Income $ 290,000 96,390 $394,398 $153,220 39,640 64,000 49,940 8,952 9,610 -325,362 $ 69,028 HW operates as a sole proprietorship, and Hank reports on a calendar year. Hank uses the cash method of accounting and plans to do the same with HW (HW has no inventory of donuts because unsold donuts are not salable). HW does not purchase donut supplies on credit, nor does it generally make sales on credit. Hank has provided the following details for specific first-year transactions. 1. A small minority of HW clients complained about the catering service.…

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