Under the new Tax Cut and Jobs Act of 2017 rules for the computation of taxable income did not change. However, computation of tax liability changed and reflects a new 21% Federal flat tax rate for corporations. Bear Corp. has $55,000 of taxable income from its operations, $30,000 of interest income from corporate debt securities, $25,000 in income from tax-exempt municipal debt securities, and $20,000 of dividend income from common stock it holds in other corporations (such dividends are not excludable). Given the new 21% Federal flat tax rate for corporations, what is Bear Corp's tax liability? (Answer in Dollars, cents are not necessary and omit the dollar sign, $.)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Under the new Tax Cut and Jobs Act of 2017 rules for the computation of taxable income did not change.
However, computation of tax liability changed and reflects a new 21% Federal flat tax rate for corporations.
Bear Corp. has $55,000 of taxable income from its operations, $30,000 of interest income from corporate
debt securities, $25,000 in income from tax-exempt municipal debt securities, and $20,000 of dividend
income from common stock it holds in other corporations (such dividends are not excludable). Given the
new 21% Federal flat tax rate for corporations, what is Bear Corp's tax liability? (Answer in Dollars, cents are
not necessary and omit the dollar sign, $.)
Transcribed Image Text:Under the new Tax Cut and Jobs Act of 2017 rules for the computation of taxable income did not change. However, computation of tax liability changed and reflects a new 21% Federal flat tax rate for corporations. Bear Corp. has $55,000 of taxable income from its operations, $30,000 of interest income from corporate debt securities, $25,000 in income from tax-exempt municipal debt securities, and $20,000 of dividend income from common stock it holds in other corporations (such dividends are not excludable). Given the new 21% Federal flat tax rate for corporations, what is Bear Corp's tax liability? (Answer in Dollars, cents are not necessary and omit the dollar sign, $.)
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