Week 1 Assignment
PROBLEM 2-6: controversy of Retained honorarium
In its most recent financial statements, Newhouse Inc. describe $50 million of net income and $810 million of retained earnings. The introductory retained earnings were $780 million. How much in dividends was paid to shareholders during the course of instruction?
Answer:-
Dividends Paid = Previous Balance Retained Earnings + pay Income - Recent Retained Earnings
Dividends Paid = ($780,000,000 + $50,000,000) - $810,000,000
= $830,000,000 - $810,000,000
= $20,000,000
= $20 cardinal
PROBLEM 2-7: Corporate tax income Liability
The Talley Corporation had a assessable income of $365,000 from operations after all operating costs nevertheless before (1) interest charges of $50,000, (2) dividends received of $15,000, (3) dividends paid of $25,000, and (4) income taxes. What are the unanimouss income tax liability and its after-tax income? What are the companys marginal and average tax rates on assessable income?
Answer :-
Companys assess Liability:
ratable Operating Income: $365,000
nonexempt Interest: ($50,000)
Taxable Dividends Received: $15,000 x (1- 0.7%) = $4,500
Total Taxable Income: $319,500
The Companys Marginal measure is 39% (From book)
Non-Taxable Dividends: $15,000 x 0.7% = $10,500
Tax Liability: $22,250 + ($319,500 - $100,000) x 0.
39% = $107,855
Tax Liability = $107,855
After Tax-Income:
Taxable Income: $319,500
Taxable: ($107,855)
Non-Taxable Dividends: $15,000 x 0.7% = $10,500
Net Income: $222,145
Average Tax range = Taxable Interest Income / Taxable Operating Income
Average Tax Rate = $107,855 / $319,500
Average Tax Rate = 0.3375 x 100%
Average Tax Rate = 33.8 %
PROBLEM 2-9: Corporate After-Tax Yield
The Shrieves Corporation has $10,000 that it plans to invest in sellable securities. It is choosing among AT&T bonds, which production 7.5%, state of Florida muni bonds, which yield 5% (but are not taxable), and AT&T preferred stock, with a dividend yield of 6%. Shrieves...If you want to set down a full essay, order it on our website: Orderessay
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