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Builtrite had sales of $700,000 and COGS of $280,000. In addition, operating expenses were calculated at 25% of sales. Builtrite also received dividends of $50,000 and paid out common stock dividends of $25,000 to its stockholders. A long-term capital gain of $70,000 was realized during the year along with a capital loss of $50,000
Based on the above information answer questions 3 and 4 I think I got 1 and 2 correct. Question 1 2 pts What is Builtrites taxable income? $280,000 $257,000 $242,000 $217,000 Question 2 2 pts Based on their taxaQuestion 3 2 pts If we add to our problem that Builtrite also had $10,000 in interest expense, how much would this interest e

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Answer #1

3.

If Builtrite also had interest expense amounting to $10000 the cost of interest expense will be
$6,100
(working : $10000( 1-tax rate) i.e. 39%
therefore $10000*.61=$6100

4.

If Builtrite had long term capital loss of $30000 ( instead of $ 50000 as long term capital loss ) then

taxable income would increase by $20000.

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