a.
Firm's tax on its operating earning
Operating Earning = $490,000
Tax on operating earning = 0.4 * 490000
Tax on Operating Earning = $196,000
b.
Interest Income from Zig Manufacturing Bonds = $20,000
Tax on Interest Income = 0.4 * 20000
Tax on Interest Income = $8,000
After tax amount of Interest Income = $12,000
c.
Dividend Income from Tank Industries = $20,000
Tax on Dividend Income after 70% dividend exclusion = 0.4 *(1 - 0.7) * 20000
Tax on Dividend Income = $2,400
After Tax amount of Dividend Income = $17,600
d.
Tax on Interest Income = $8,000
After tax amount of Interest Income = $12,000
Tax on Dividend Income = $2,400
After tax amount of Dividend Income = $17,600
Due to dividend exclusion clause of 70%, tax on dividend income is lower than tax on Interest Income, so even if before taxes income from interest and dividend are same, but tax on them makes a substantial difference in after tax values
e.
Firm's Total Tax Liability = 196000 + 8000 + 2400
Firm's Total Tax Liability = $206,400
Give me answer D,E P1-9 Interest versus dividend income During the year just ended, Shering Distributors,...
With explanation PLZ.
Interest versus dividend income During the year just ended, Shering Distributors, Inc., had pretax earnings from operations of $490,000. In addition, during the year it received $20,000 in income from interest on bonds it held in Zig Manufacturing and received $20,000 inincome from dividends on its 5% common stock holding in Tank Industries, Inc. Shering is in the 40% tax bracket and is eligible for a 70% dividend exclusion on its Tank Industries stock. a. Calculate the...
Please show me on excel. Interest versus dividend income Last year, Shering Corporation had pretax earnings from operations of $490,000. In addition, it received $20,000 in income from interest on bonds it held in Zig Manufacturing and received $20,000 in income from dividends on its 5% common stock holding in Tank Industries, Inc. Shering faces a flat 21% tax rate and is eligible for a 50% dividend exclusion on its Tank Industries stock. Calculate the firm’s tax on its operating...
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Interest versus dividend income Last year, Shering Corporation had pretax earnings from operations of $488,000. In addition, it received $23,000 in income from interest on bonds it held in Zig Manufacturing and received $23,000 in income from dividends on its 4% common stock holding in Tank Industries, Inc. Shering is in the 21% tax bracket and is eligible for a 50% dividend exclusion on its Tank Industries stock. a. Calculate the firm's tax...
Interest versus dividend income Last year, Shering Corporation had pretax earnings from operations of $484,000. In addition, it received $29,000 in income from interest on bonds it held in Zig Manufacturing and received $29.000 in income from dividends on its 5% common stock holding in Tank Industries, Inc. Shering is in the 21% tax bracket and is eligible for a 50% dividend exclusion on its Tank Industries stock. a. Calculate the firm's tax on its operating earnings only. b. Find...
nterest versus dividend income During the year ust ended, Shering Distributors, Inc. had pretax earnings from operations of S485,000 In addton, during the year t received the 31% tax bracket and is eligible for a 70% dividend edus on on its Tank Industries stock. a. Calculate the firm's tax on its operating earnings only b. Find the tax and the after-tax amount attributable to the interest income from Zig Manufacturing bonds. c. Find the tax and the after-tax amount attributable...
Interest versus dividend income Last year, Shering Corporation had pretax earnings from operations of $485,000. In addition, it received S28,000 in income from interest on bonds it heid in Zig Manufacturing and a. Calculate the firm's tax on its operating eamings only b. Find the tax and the after-tax amount attributable to the interest income from Zig Manufacturing bonds c. Find the tax and the after-tax amount attributable to the dividend income from the Tank Industries, Inc., common stock. d....
Interest versus dividend income Last year, Shering Corporation had pretax earnings from operations of $484,000. In addition, it received $20,000 in income from interest on bonds it held in Zig Manufacturing and received $20,000 in income from dividends on its 5% common stock holding in Tank Industries, Inc. Shering is in the 21% tax bracket and is eligible for a 50% dividend exclusion on its Tank Industries stock. a. Calculate the firm's tax on its operating earnings only. b. Find...
Interest versus dividend expense Michaels Corporation expects earnings before interest and taxes to be $41,000 for the current period. Assuming a flat ordinary tax rate of 29%, compute the firm's earnings after taxes and earnings available for common stockholders (earnings after taxes and preferred stock dividends, if any) under the following conditions: a. The firm pays $11,800 in interest. b. The firm pays $11,800 in preferred stock dividends. a. Complete the fragment of Michaels Corporation's income statement below to compute...
Interest versus dividend expense Michaels Corporation expects earnings before interest and taxes to be $48,000 for the current period. Assuming a flat ordinary tax rate of 30%, compute the firm's earnings after taxes and earnings available for common stockholders (earnings after taxes and preferred stock dividends, if any) under the following conditions: a. The firm pays $12,500 in interest. b. The firm pays $12,500 in preferred stock dividends. a. Complete the fragment of Michaels Corporation's income statement below to compute...
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18. Income statement The income statement, also known as a profit and loss (P&L) statement, provides a snapshot of a company's financial performance during a specified period of time. It reports a firm's gross income, expenses, net income, and the income that is available for distribution to its preferred and common shareholders. The income statement is prepared using the generally accepted accounting principles (GAAP) that match the firm's revenues and expenses to the...