Your corporation has the following cash flows: Give true answer this accounting question Your corporation has the following cash flows:Operating income$250,000Interest received$10,000Interest paid$45,000Dividends received $10,000Dividends paid$50,000If the applicable income tax rate is 40% (federal and state combined), and if70% of dividends received are exempt from taxes, what is the corporation'stax liability?a. $99,408b. $72,376c. $87,200d. $66,272e. $74,120

Step 1: Define Income TaxIncome tax refers to a type of direct tax that the government imposed on…

Answered: Your corporation has the following cash…

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter2: Financial Statements, Cash Flow,and Taxes

Section: Chapter Questions

Problem 10MC

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The Berndt Corporation expects to have sales of 12 million. Costs other than depreciation are expected to be 75% of sales, and depreciation is expected to be 1.5 million. All sales revenues will be collected in cash, and costs other than depreciation must be paid for during the year. Berndts federal-plus-state tax rate is 40%. Berndt has no debt. a. Set up an income statement. What is Berndts expected net income? Its expected net cash flow? b. Suppose Congress changed the tax laws so that Berndts depreciation expenses doubled. No changes in operations occurred. What would happen to reported profit and to net cash flow? c. Now suppose that Congress changed the tax laws such that, instead of doubling Berndts depreciation, it was reduced by 50%. How would profit and net cash flow be affected? d. If this were your company, would you prefer Congress to cause your depreciation expense to be doubled or halved? Why?
Assume that a corporation has $100,000 of taxable income from operations plus $5,000 of interest income and $10,000 of dividend income. What is the company’s federal tax liability?
Assume a corporation has earnings before depreciation and taxes of $145,000, depreciation of $35,000, and that it has a 30% combined tax bracket. What are the after-tax cash flows for the company? a) $112,000 Ob) $106,800 c) $116,600 Od) $115,800 0
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Assume a corporation has earnings before depreciation and taxes of $82,000, depreciation of $45,000, and that it has a 25% combined tax bracket. What are the after-tax cash flows for the company?
Using the Corporated Federal Income Tax Rate (2006), calculate the federal income tax that should be paid by a company that has a gross income of $250,000, expenses of $70,000, and depreciation of $20,000 O a. $22,250 O b. $160,000 Oc $45,650 O d. $62,400
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If a company earns $48,000 income on a municipal bond and the tax rate is 20%, Income tax expense would exceed income taxes to pay by 48,000 x .20 Income tax expense would be less than income taxes to pay by 48,000 x .20 The current portion of income taxes would exceed income tax expense by $48,000. Income tax expense would equal income taxes to pay.
The Moore Enterprise has gross profit of $1,180,000 with amortization expense of $510,000. The Kipling Corporation has $1,180,000 in gross profits but only $75,000 in amortization expense. The selling and administration expenses are $135,000; the same for each company. If the tax rate is 20 percent, calculate the cash flow for each company. Kipling Cash flow $ Difference in cash flow Moore $ Calculate the difference in cash flow between the two firms? $
Assume a corporation has earnings before depreciation and taxes of $100,000, depreciation of $50,000, and that it has a 30 percent tax bracket. Compute its cash flow using the format below. Earnings before depreciation and taxes Depreciation Earnings before taxes Taxes @ 30% Earnings after taxes Depreciation
Calculate Anaheim Corporation's excess net passive income tax in each of the following alternative scenarios: a. Passive investment income, $100,000; expenses associated with passive investment income, $40,000; gross receipts, $208,000; taxable income if a C corporation, $22,400; corporate Earnings and profit, $41,000. Excess net passive income tax??? b. Passive investment income, $100,000; expenses associated with passive investment income, $70,000; gross receipts, $208,000; taxable income if a C corporation, $5,600; corporate Earnings and profit, $41,000. Excess net passive income tax??? c. Passive investment income, $100,000; expenses associated with passive investment income, $40,000; gross receipts, $208,000; taxable income if a C corporation, $22,400; corporate Earnings and profit, $0. Excess net passive income tax???

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