You own a construction company with a revenue of $395,000. The direct costs of construction are $280,000.Your annual general overhead is $22,000, which includes $3500 in meals and entertainment; $3000 in officeutilities; $2500 for office laptop; $8000 for office desks and chairs; $500 for office supplies; and miscellaneous.The allowed depreciation for office utilities is $50; for office laptop is $200; and for office desks and chairs is$85; and for office supplies is $15.In addition, the past allowed depreciation amounted to $300.During the year you also earned $8000 in dividends and $800 in interest. Determine your net taxable incomefrom construction business and marginal net taxable income. The income tax rate for the company is 25%.Calculate the net profit of the company.

Net Taxable Income: The Starting Point for TaxesGross Profit: We begin by calculating the gross…

Answered: You own a construction company with a…

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter9: Acquisitions Of Property

Section: Chapter Questions

Problem 46P

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How would each of the following costs be classified if units produced is the activity base? a. Salary of factory supervisor ($120,000 per year) b. Straight-line depreciation of plant and equipment c. Property rent of $11,500 per month on plant and equipment
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