Last year, your company had sales of $2.4 million. the firm's costs of goods sold amounted to 34% of sales. the firm also paid cash operating expenses of $1,200,000, and had $80,500 in depreciation expense. the firm had $450,000 in 9% coupon bonds outstanding and paid $25,000 in dividends to its common stockholders. also, the firm received $40,000 in dividend income from its holdings of other common stocks. compute the corporation's tax liability.

tax expense: 34%        103,020 dollars

Explanation:

Sales                         2,400,000

COGS 34% of sales    (816,000)  

Gross profit                1,584,000‬

other operating        (1,200,000)

depreciation                  (80,500)

interest expense

450,000 x 9%                (40,500)

gain on investment        40,000  

Income before taxes    303,000

tax expense: 34%        103,020

The dividends paid are not an expense or revenue for the period. is the distribution of prior period gains.

one of the disadvantages of getting a government sponsored mortgage is they put a limit on the purchase price of the house. because the government is in charge of the mortage loan and terms, they are able to control how much money they are allowing someone to take out for the loan. not only are they incontrol, it's a lengthy process for a government sponsored mortgage.