Business, 23.01.2020 05:31 amberc5110

During the year just ended, shering distributors, inc., had pretax earnings from operations of $490,000. in addition, during the year it received $20,000 in income from interest on bonds it in zig manufacturing and received $20,000 in income from dividends on its 5% common stock holding in tank industries, inc. shering is in the 40% tax bracket and is eligible for a 70% dividend exclusion on its tank industries stock.

a. calculate the firm's tax on its operating earnings only.

b. find the tax and after-tax amount attributable to dividend and interest income.

b. interest c. dividend
before-tax income $0 $0
less exclusion 0 $0 use the exclusion 70%
taxable income $0 $0
tax 40% $0 $0
after-tax amount $0
$0

â compare, contrast, and discuss theâ after-tax amounts resulting from the interest income and dividend income calculated in parts b. and c. â(select all the choices thatâ apply.) a. theâ after-tax amount of dividendsâ received, $ 24 comma 165â, exceeds theâ after-tax amount ofâ interest, $ 21 comma 330â, due to the 50 % corporate dividend exclusion. b. theâ after-tax amount of dividendsâ received, $ 21 comma 330â, exceeds theâ after-tax amount ofâ interest, $ 24 comma 165â, due to the 50 % corporate dividend exclusion. c. since theâ after-tax amount of interest exceeds theâ after-tax amount ofâ dividends, this increases the attractiveness of stock investments by one corporation in another relative to bond investments. d. since theâ after-tax amount of dividends exceeds theâ after-tax amount ofâ interest, this increases the attractiveness of stock investments by one corporation in another relative to bond investments.

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During the year just ended, shering distributors, inc., had pretax earnings from operations of $490,...

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