Lintner Beverage Corp. reported the following information from
their financial statements:
Operating income (EBIT) =
$10,500,000...
Lintner Beverage Corp. reported the following information from
their financial statements:
Operating income (EBIT) =
$10,500,000
Interest payments on long-term debt =
$1,750,000
Dividend income =
$1,000,000
Calculate Lintner's total tax liability using the corporate tax
schedule below:
Taxable Income
Tax on Base of Bracket
Percentage on Excess above Base
$0-$50,000
$0
15%
$50,000-$75,000
7,500
25
$75,000-$100,000
13,750
34
$100,000-$335,000
22,250
39
$335,000-$10,000,000
113,900
34
$10,000,000-$15,000,000
3,400,000
35
$15,000,000-$18,333,333
5,150,000
38
Over $18,333,333
6,416,667...
Griffey Communications recently realized $125,000 in operating
income. The company had interest income of $25,000 and...
Griffey Communications recently realized $125,000 in operating
income. The company had interest income of $25,000 and realized
$70,000 in dividend income. The company’s interest expense was
$40,000.
Taxable Income
Tax on Base of Bracket
Percentage on Excess above Base (%)
Up to $50,000
0
15
50,000-75,000
7,500
25
75,000-100,000
13,750
34
100,000-335,000
22,250
39
335,10,000,000
113,900
34
10,000,000-15,000,000
3,400,000
35
15,000,000-18,333,333
5,150,000
38
Over 18,333,333
6,416,667
35
Using the corporate tax schedule above, what is Griffey's tax
liability?
(please explain...
Moose Industries faces the following tax schedule:
Taxable Income Tax on Base of Bracket Percent on...
Moose Industries faces the following tax schedule:
Taxable Income Tax on Base of Bracket Percent on Excess Above
Base
Base Up to $50,000 $0 15%
$50,000-$75,000 7,500 25
$75,000-$100,000 13,750 34
$100,000-$335,000 22,250 39
$335,000-$10,000,000 113,900 34
$10,000,000-$15,000,000 3,400,000 35
$15,000,000-$18,333,333 5,150,000 38
Over $18,333,333 6,416,667 35
Last year the company realized $450,000 in operating income
(EBIT). Its annual interest expense is $1,500,000.
a) How much tax does the company owe on this income?
b) What is the average tax...
Problem 7-1
Accounting Periods (LO 7.1)
The Au Natural Clothing Factory has changed its year-end from...
Problem 7-1
Accounting Periods (LO 7.1)
The Au Natural Clothing Factory has changed its year-end from a
calendar year-end to March 31, with permission from the IRS. The
income for its short period from January 1 to March 31 is
$24,000.
Tax Rate Schedule for Corporations
Taxable Income Over
But Not Over
The Tax Is
Of the Amount Over
0
$50,000
15%
0
$50,000
75,000
$7,500 + 25%
$50,000
75,000
100,000
13,750 + 34%
75,000
100,000
335,000
22,250 + 39%...
2013 Corporate Tax Rates
If a Corporation's
Taxable Income Is
It Pays This
Amount on the...
2013 Corporate Tax Rates
If a Corporation's
Taxable Income Is
It Pays This
Amount on the
Base of the Bracket
Plus This Percentage
on the Excess over the
Base (Marginal Rate)
Average Tax
Rate at
Top of Bracket
Up to $50,000
$0
15.0%
15.0%
$50,000 - $75,000
7,500
25.0
18.3
$75,000 - $100,000
13,750
34.0
22.3
$100,000 - $335,000
22,250
39.0
34.0
$335,000 - $10,000,000
113,900
34.0
34.0
$10,000,000 - $15,000,000
3,400,000
35.0
34.3
$15,000,000 - $18,333,333
5,150,000
38.0
35.0...
2013 Individual Tax Rates
Single Individuals
If a Corporation's Taxable Income Is
It Pays This
Amount...
2013 Individual Tax Rates
Single Individuals
If a Corporation's Taxable Income Is
It Pays This
Amount on the
Base of the Bracket
Plus This Percentage
on the Excess over the
Base (Marginal Rate)
Average Tax
Rate at
Top of Bracket
Up to $8,925
$0
10.0%
10.0%
$8,925 - $36,250
892.50
15.0
13.8
$36,250 - $87,850
4,991.25
25.0
20.4
$87,850 - $183,250
17,891.25
28.0
24.3
$183,250 - $398,350
44,603.25
33.0
29.0
$398,350 - $400,000
115,586.25
35.0
29.0
Over $400,000
116,163.75
39.6...
Based on the below simplified income statements, which Company
had the better year.. . and why?...
Based on the below simplified income statements, which Company
had the better year.. . and why?
A
B
C
Sales
100
105
90
Cost of Goods Sold
75
50
80
Gross Income
25
55
10
Operating Expense (Selling, R&D, Admin)
10
30
20
Earnings Before Interest & Taxes (EBIT)
10
25
-10
Interest Expense
1
20
0
Extraordinary income/(Expense)
0
0
25
Tax
2
2
0
Net Income
7
3
15
Financial data for Bingham Company for last year appear
below:
Bingham Company
Balance Sheet
For the...
Financial data for Bingham Company for last year appear
below:
Bingham Company
Balance Sheet
For the years ended Dec 31 2018 and 2019
ASSETS
Dec 31, 2018
Dec 31, 2019
Cash
135,000
266,000
Accounts Receivable
225,000
475,000
Inventory
314,000
394,000
Plant+Equipment (net)
940,000
860,000
Investment in Carr Corp.
104,000
101,000
Land
198,000
65,000
Total Assets
1,916,000
2,161,000
LIABILITIES + EQUITY
Accounts Payable
88,000
119,000
Long-Term Debt
585,000
665,000
Owner’s equity
1,243,000
1,377,000
Total Liabilities + Equity
1,916,000
2,161,000
Bingham Company...
The following unadjusted trial balance is for Montana
Construction Company as of year-end for the December...
The following unadjusted trial balance is for Montana
Construction Company as of year-end for the December 31, 20x7
fiscal year. The December 31, 20x6 credit balance of the
stockholders’ equity account is $46,900, and the stockholders
invested $40,000 cash in the company during 20x7.
NO. Account
Title
Debit
Credit
101
Cash
$7,000
126
Supplies
$16,000
128 Pre-paid
insurance
$12,600
167
Equipment
$200,000
168 Accumulated depreciation –
equipment $14,000
201 Accounts payable $6,800
251 Long-term notes payable...
Comparative financial statements for Weller Corporation, a
merchandising company, for the year ending December 31 appear...
Comparative financial statements for Weller Corporation, a
merchandising company, for the year ending December 31 appear
below. The company did not issue any new common stock during the
year. A total of 700,000 shares of common stock were outstanding.
The interest rate on the bond payable was 10%, the income tax rate
was 40%, and the dividend per share of common stock was $0.75 last
year and $0.40 this year. The market value of the company’s common
stock at the...