The Dakota Corporation had a 2021 taxable income of $20,000,000 from operations after all operating costs but before (1) interest charges of $3,800,000, (2) dividends received of $320,000, (3) dividends paid of $2,200,000, and (4) income taxes (the firm’s tax rate is 21 percent).
The Dakota Corporation had a 2021 taxable income of $20,000,000 from operations after all operating costs but before (1) interest charges of $3,800,000, (2) dividends received of $320,000, (3) dividends paid of $2,200,000, and (4) income taxes (the firm’s tax rate is 21 percent).
a. Calculate Dakota’s income tax liability. (Round your answer to the nearest dollar amount.)
Given Operating Income EBIT(Earning Before Interest and Taxes)= $ 20000000
Add Indirect Income (Dividends Received) =320000
EBIT (Earning Before Interest and Taxes) = 20320000
Less interest = 3800000
EBT (Earning Before Tax) = 16520000
Less tax 21% =3469200 is his income tax liability.
Step by step
Solved in 2 steps
The Dakota Corporation had a 2021 taxable income of $20,000,000 from operations after all operating costs but before (1) interest charges of $3,800,000, (2) dividends received of $320,000, (3) dividends paid of $2,200,000, and (4) income taxes (the firm’s tax rate is 21 percent).
a. Calculate Dakota’s income tax liability. (Round your answer to the nearest dollar amount.)
The answer is NOT 3,469,200
by Bartleby Expert
