Last year, California Sushi and Such (CSS) had sales of $65 million. The firm's operating expenses amounted to $20 million and costs of goods sold totaled $15 million. In addition, CSS received $80,000 in dividend income, and paid $300,000 in dividends to its stockholders. CSS has $25 million in bonds outstanding with an annual interest payment of 9%. The firm also had $8 million in depreciation expense, and sold land for $3.5 million that had been purchased for $2.5 million several years earlier. What is the firm's tax liability?
Last year, California Sushi and Such (CSS) had sales of $65 million. The firm's operating expenses amounted to $20 million and costs of goods sold totaled $15 million. In addition, CSS received $80,000 in dividend income, and paid $300,000 in dividends to its stockholders. CSS has $25 million in bonds outstanding with an annual interest payment of 9%. The firm also had $8 million in depreciation expense, and sold land for $3.5 million that had been purchased for $2.5 million several years earlier. What is the firm's tax liability?
Chapter9: The Cost Of Capital
Section: Chapter Questions
Problem 7P
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![Last year, California Sushi and Such (CSS) had sales of $65 million. The firm's
operating expenses amounted to $20 million and costs of goods sold totaled
$15 million. In addition, CSS received $80,000 in dividend income, and paid
$300,000 in dividends to its stockholders. CSS has $25 million in bonds
outstanding with an annual interest payment of 9%. The firm also had $8
million in depreciation expense, and sold land for $3.5 million that had been
purchased for $2.5 million several years earlier. What is the firm's tax liability?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F265138a3-752a-4166-840d-2e2be97b1ca0%2F75778db4-d7ae-4633-a450-edf48e1357d7%2Fhhr8ir5_processed.png&w=3840&q=75)
Transcribed Image Text:Last year, California Sushi and Such (CSS) had sales of $65 million. The firm's
operating expenses amounted to $20 million and costs of goods sold totaled
$15 million. In addition, CSS received $80,000 in dividend income, and paid
$300,000 in dividends to its stockholders. CSS has $25 million in bonds
outstanding with an annual interest payment of 9%. The firm also had $8
million in depreciation expense, and sold land for $3.5 million that had been
purchased for $2.5 million several years earlier. What is the firm's tax liability?
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