Last year your construction company had operating revenues of $1,240,000, operating costs of $520,000 and a CCA of $98,000 based upon existing assets The beginning of that same year the company bought essential new equipmen for $130,000. This equipment has a CCA rate of 30%. The company has borrowed money and is paying $18,000 per year in interest. Interest paid on borrowed money is tax deductible, so it reduces the taxable income. You also managed somehow to deduct the first-class flight tickets for all the vice- presidents and their spouses on a business trip to Cancun, Mexico, which cost total of $50,000. The tax rate is 37.62%. Taxable income is close to:
Last year your construction company had operating revenues of $1,240,000, operating costs of $520,000 and a CCA of $98,000 based upon existing assets The beginning of that same year the company bought essential new equipmen for $130,000. This equipment has a CCA rate of 30%. The company has borrowed money and is paying $18,000 per year in interest. Interest paid on borrowed money is tax deductible, so it reduces the taxable income. You also managed somehow to deduct the first-class flight tickets for all the vice- presidents and their spouses on a business trip to Cancun, Mexico, which cost total of $50,000. The tax rate is 37.62%. Taxable income is close to:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Last year your construction company had operating revenues of $1,240,000,
operating costs of $520,000 and a CCA of $98,000 based upon existing assets.
The beginning of that same year the company bought essential new equipment
for $130,000. This equipment has a CCA rate of 30%. The company has
borrowed money and is paying $18,000 per year in interest. Interest paid on
borrowed money is tax deductible, so it reduces the taxable income. You also
managed somehow to deduct the first-class flight tickets for all the vice-
presidents and their spouses on a business trip to Cancun, Mexico, which cost a
total of $50,000. The tax rate is 37.62%.
Taxable income is close to:
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