Question

Builtrite had sales of $900,000 and COGS of $280,000. In addition, operating expenses were calculated at...

Builtrite had sales of $900,000 and COGS of $280,000. In addition, operating expenses were calculated at 25% of sales. Builtrite also received dividends of $50,000 and paid out common stock dividends of $25,000 to its stockholders. A long-term capital gain of $70,000 was realized during the year along with a capital loss of $50,000

Based on their taxable income, what is Bullrite's tax liability?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Solution) Sales = $900,000

COGS = $280,000

Operating Expenses = 25% of Sales = 25%*900,000 = $225,000

Earnings before interest and taxes (EBIT) = Sales - COGS - Operating Expenses

= 900,000 - 280,000 - 225,000

= $395,000

Dividends income = $50,000

Long-term capital gain = $70,000

Long-term capital loss = $50,000

Net capital gain = $70,000 - $50,000

= $20,000

Total Taxable Income = EBIT + Dividend Income + Net capital gain

= 395,000 + 50,000 + 20,000

= $465,000

Federal corporate tax rate = 21%

Tax Liability = 21%* 465,000 = $97,650

Please comment in case of any doubts or clarifications required. Please Thumbs Up!!

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Builtrite had sales of $900,000 and COGS of $280,000. In addition, operating expenses were calculated at...
Builtrite had sales of $900,000 and COGS of $280,000. In addition, operating expenses were calculated at 25% of sales. Builtrite also received dividends of $50,000 and paid out common stock dividends of $25,000 to its stockholders. A long-term capital gain of $70,000 was realized during the year along with a capital loss of $50,000 If Bullrite has experienced a long-term capital loss of 20,000 instead of 50,000 and still had 70,000 lon-term capital gain which of the following is correct?...
Builtrite had sales of $900,000 and COGS of $280,000. In addition, operating expenses were calculated at...
Builtrite had sales of $900,000 and COGS of $280,000. In addition, operating expenses were calculated at 25% of sales. Builtrite also received dividends of $50,000 and paid out common stock dividends of $25,000 to its stockholders. A long-term capital gain of $70,000 was realized during the year along with a capital loss of $50,000 a). What is Builtrite’s taxable income? b). Based on their taxable income, what is Builtrite’s tax liability? c). If we add to our problem that Builtrite...
                  Income Statement Sales $ 15,000 Operating expenses COGS $ 11,000 Depreciation          
                  Income Statement Sales $ 15,000 Operating expenses COGS $ 11,000 Depreciation            800 Admin expenses         1,500 Total operating expense      13,300 Operating income         1,700 Interest revenue            200 Gain on disposal of equipment            400 Income before taxes         2,300 Income tax            920 Net income $    1,380 Balance sheet Assets This year Last year Cash $    3,000 $    1,100 A/R            500            530 Inventory            850            820 Prepaid Ins            150            200 Equipment...
Trail Corporation has gross profits on sales of $140,000 and deductible expenses of $90,000. In addition,...
Trail Corporation has gross profits on sales of $140,000 and deductible expenses of $90,000. In addition, Trail has a net capital loss of $30,000. Trail's taxable income is $50,000 $20,000 $140,000 $60,000 Burt and Tiffany form Owl Corporation. Burt transfers property (basis of $20,000 and fair market value of $130,000), while Tiffany agrees to serve as Owl’s manager for one year. Each receives 100 shares of Owl Corporation stock. The value of Tiffany’s services for one year is $130,000. Which...
Last year, California Sushi and Such (CSS) had sales of $65 million. The firm's operating expenses...
Last year, California Sushi and Such (CSS) had sales of $65 million. The firm's operating expenses amounted to $20 million and costs of goods sold totaled $15 million. In addition, CSS received $80,000 in dividend income, and paid $300,000 in dividends to its stockholders. CSS has $25 million in bonds outstanding with an annual interest payment of 9%. The firm also had $8 million in depreciation expense, and sold land for $3.5 million that had been purchased for $2.5 million...
In the current year, Riflebird Company had operating income of $220,000, operating expenses of $175,000, and...
In the current year, Riflebird Company had operating income of $220,000, operating expenses of $175,000, and a long-term capital loss of $10,000. How do Riflebird Company and Roger, the sole owner of Riflebird, report this information on their respective Federal income tax returns for the current year under the following assumptions? Riflebird Company is a C corporation (no dividends were paid during the year). Roger reports (...) net operating profit and (...) long-term capital loss on his tax return. Riflebird...
Last year, California Sushi and Such (CSS) had sales of $65 million. The firm's operating expenses...
Last year, California Sushi and Such (CSS) had sales of $65 million. The firm's operating expenses amounted to $20 million and costs of goods sold totaled $15 million. In addition, CSS received $80,000 in dividend income, and paid $300,000 in dividends to its stockholders. CSS has $25 million in bonds outstanding with an annual interest payment of 9%. The firm also had $8 million in depreciation expense, and sold land for $3.5 million that had been purchased for $2.5 million...
Last year, California Sushi and Such (CSS) had sales of $65 million. The firm's operating expenses...
Last year, California Sushi and Such (CSS) had sales of $65 million. The firm's operating expenses amounted to $20 million and costs of goods sold totaled $15 million. In addition, CSS received $80,000 in dividend income, and paid $300,000 in dividends to its stockholders. CSS has $25 million in bonds outstanding with an annual interest payment of 9%. The firm also had $10 million in depreciation expense, and sold land for $3.5 million that had been purchased for $2.5 million...
For Year 2019 a firm had sales of $900,000, cost of goods sold of $685,000, depreciation...
For Year 2019 a firm had sales of $900,000, cost of goods sold of $685,000, depreciation expense of $35,000, interest expense of $15,000, and dividends paid of $18,800. At the beginning of the year, net fixed assets were $580,000, current assets were $300,000, and current liabilities were $140,000. At the end of the year, net fixed assets were $640,000, current assets were $400,000, and current liabilities were $200,000. The tax rate was 21%. Income Statement                                     6(a) What was the...
Raymond had sales of $739,000. Cost of goods sold, administrative and selling expenses, and depreciation expenses...
Raymond had sales of $739,000. Cost of goods sold, administrative and selling expenses, and depreciation expenses were $576,000, $105,000, and $133,000, respectively. In addition, Raymond had an interest expense of $95,000 and a tax rate of 40 percent. (Ignore any tax loss carryback or carryforward provisions.) Assume Raymond paid out $16,000 in cash dividends. If spending on net fixed assets and net working capital was zero, and if no new stock was issued during the year, what is the firm's...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT