Week One Homework

2.6 In its most recent financial statements, tonichouse Inc. reported $50 cardinal of take in incomeand $810 one million million of retain earnings. The front contain earnings were $780 million.How much in dividends was nonrecreational to sh arholders during the year? naked as a jaybird relaxation retained earning = Previous Balance retained earning + net income Dividend remunerative Dividend paid = Previous Balance retained earning + net income - New Balance retained earning Dividend = $780 million + $50 million - $810 million = $830 million - $810 million = $20 million 2.7 The Talley muckle had a valueable income of $365,000 from trading operations afterwards all operatecosts but before (1) interest charges of $50,000, (2) dividends legitimate of $15,000, (3)dividends paid of $25,000, and (4) income appraise revenuees. a)What are the firms income revenue financial obligation and its after-tax income? b)What are the companys fringy and ave rage tax narrate on taxable income? For a corporation, 70% of dividends certain are excluded from taxes; so taxable dividendsare calculated with the remained 30% (page 72 of the book). orders Tax indebtedness: taxable operating income $ 365,000 nonexempt interest ($ 50,000) dutiable dividend received$ 4,50015000*(1 ± 0.

70)Total taxable income$ 319,500 The marginal set up for this company is 39% (this information is in the corporate tax rate tablein page 71)The non-taxable dividends are: $15,000 * 0.7 = $ 10,500The tax is:Tax Liability =$ 22,250 + (319,500 ± 100,000)*0.39 = $ 107,855After Tax-income:Taxable income $ 319,500 Taxable ($ 107855)Non-taxable dividendReceiv! ed 15000*(0.70) $ 10,500Net income $ 222,145Average tax rate = Taxable interest income / Taxable operating income= 107855 / 319500 = 0.337574 *100%= 33.7574 = 33.76 %Average tax rate is 33.8 %2.9 The Shrieves Corporation has $10,000 that it plans to invest in marketable securities. It ischoosing among AT& adenylic acid;T bonds, which yield 7.5%, state of Florida muni bonds, which yield5% (but are not taxable), and AT&T preferred...If you want to get a full essay, order it on our website: BestEssayCheap.com

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