Question

Need taxable dividend income.

(Corporate income tax) Sandersen Inc. sells minicomputers. During the past year the company's sales were $3.2 million. The cost of its merchandise sold came to $1.7 million, and cash operating expenses were $400,000; depreciation expense was $106,000, and the firm paid $146,000 in interest on its bank loans. Also, the corporation received $52,000 in dividend income but paid $21,000 in the form of dividends to its own common stockholders. Calculate the corporation's tax liability by using the corporate tax rate structure in the popup window, Calculate the gross profits. The gross profits are $ 1500000. (Round to the nearest dollar.) Calculate the operating profits. The operating profits are $ 994000. (Round to the nearest dollar.) Calculate the taxable dividend income. The taxable dividend income is $ (Round to the nearest dollar.) - X Data Table (Click on the following icon in order to copy its contents into a spreadsheet.) Corporate Tax Rates 15% $0-$50,000 25% $50,001—$75,000 34% $75,001—$10,000,000 35% over $10,000,000 Additional surtax: • 5% on income between $100,000 and $335,000 • 3% on income between $15,000,000 and $18,333,333 Print Done

Answer 1

Taxable Income = Sales - Cost of merchandise sold - operating expenses - depreciation - interest income
Taxable Income = $ 3,200,000 - $ 1,700,000 - $ 400,000 - $ 106,000 - $ 146,000
	= $ 848,000
Corporate Tax Liability = 50,000 * 15% + ( 75,000 - 50,000 )* 25% + ( 848,000 - 75,000 ) * 34% + ( 335,000 - 100,000 ) *5%
		= ( 50,000 * 15 % ) + ( 25,000 *25% ) + ( 773,000 * 34% ) + ( 235,000 * 5% )
		= $ 288,320