verbend Incorporated received a $445,000 dividend from stock it held in Hobble Corporation. Riverbend's taxable income is ,010,000 before deducting the dividends-received deduction (DRD), a $79,500 NOL carryover, and a $179,000 charitable ntribution. Use Exhibit 16-7. te: Round your tax rates to 2 decimal places. Leave no answer blank. Enter zero if applicable. quired: What is Riverbend's deductible DRD assuming it owns 10.5 percent of Hobble Corporation? Assming that it owns 10.5 percent of Hobble Corporation, what is Riverbend's marginal tax rate on the dividend after taking the DRD into account? What is Riverbend's DRD assuming it owns 59 percent of Hobble Corporation?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Ff.116.

 

Riverbend Incorporated received a $445,000 dividend from stock it held in Hobble Corporation. Riverbend's taxable income is
$3,010,000 before deducting the dividends-received deduction (DRD), a $79,500 NOL carryover, and a $179,000 charitable
contribution. Use Exhibit 16-7.
Note: Round your tax rates to 2 decimal places. Leave no answer blank. Enter zero if applicable.
Required:
a. What is Riverbend's deductible DRD assuming it owns 10.5 percent of Hobble Corporation?
b. Assming that it owns 10.5 percent of Hobble Corporation, what is Riverbend's marginal tax rate on the dividend after taking the DRD
into account?
c. What is Riverbend's DRD assuming it owns 59 percent of Hobble Corporation?
d. Assming that it owns 59 percent of Hobble Corporation, what is Riverbend's marginal tax rate on the dividend?
e. What is Riverbend's DRD assuming it owns 87 percent of Hobble Corporation (and is part of the same affiliated group)?
f. Assming that it owns 87 percent of Hobble Corporation (and is part of the same affiliated group), what is Riverbend's marginal tax
rate on the dividend?
Transcribed Image Text:Riverbend Incorporated received a $445,000 dividend from stock it held in Hobble Corporation. Riverbend's taxable income is $3,010,000 before deducting the dividends-received deduction (DRD), a $79,500 NOL carryover, and a $179,000 charitable contribution. Use Exhibit 16-7. Note: Round your tax rates to 2 decimal places. Leave no answer blank. Enter zero if applicable. Required: a. What is Riverbend's deductible DRD assuming it owns 10.5 percent of Hobble Corporation? b. Assming that it owns 10.5 percent of Hobble Corporation, what is Riverbend's marginal tax rate on the dividend after taking the DRD into account? c. What is Riverbend's DRD assuming it owns 59 percent of Hobble Corporation? d. Assming that it owns 59 percent of Hobble Corporation, what is Riverbend's marginal tax rate on the dividend? e. What is Riverbend's DRD assuming it owns 87 percent of Hobble Corporation (and is part of the same affiliated group)? f. Assming that it owns 87 percent of Hobble Corporation (and is part of the same affiliated group), what is Riverbend's marginal tax rate on the dividend?
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