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January 1, 2021. During the year, Bravo reports income of $150,000 and pa idends of $30,000. Assuming that Alpha qualifies for the 80% dividend excl th respect to its investment in Bravo and that Bravo expects to pay out all distributed earnings, calculate the current taxes payable (tax paid by Alpha in rrent year) with respect to its investment in Bravo (Alpha has a 30% tax rate).

January 1, 2021. During the year, Bravo reports income of $150,000 and pa idends of $30,000. Assuming that Alpha qualifies for the 80% dividend excl th respect to its investment in Bravo and that Bravo expects to pay out all distributed earnings, calculate the current taxes payable (tax paid by Alpha in rrent year) with respect to its investment in Bravo (Alpha has a 30% tax rate).

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Alpha Company owns 30% of the outstanding common stock of Bravo Company as of January 1, 2021. During the year, Bravo reports income of $150,000 and pays dividends of $30,000. Assuming that Alpha qualifies for the 80% dividend exclusion with respect to its investment in Bravo and that Bravo expects to pay out all undistributed earnings, calculate the current taxes payable (tax paid by Alpha in the current year) with respect to its investment in Bravo (Alpha has a 30% tax rate). Alpha's current year income tax liability would be $2,700 OAlpha's current year income tax liability would be $2,160 O Alpha's current year income tax liability would be $540 O Alpha's current year income tax liability would be $1,800
Transcribed Image Text:Alpha Company owns 30% of the outstanding common stock of Bravo Company as of January 1, 2021. During the year, Bravo reports income of $150,000 and pays dividends of $30,000. Assuming that Alpha qualifies for the 80% dividend exclusion with respect to its investment in Bravo and that Bravo expects to pay out all undistributed earnings, calculate the current taxes payable (tax paid by Alpha in the current year) with respect to its investment in Bravo (Alpha has a 30% tax rate). Alpha's current year income tax liability would be $2,700 OAlpha's current year income tax liability would be $2,160 O Alpha's current year income tax liability would be $540 O Alpha's current year income tax liability would be $1,800
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