Last year, your company had sales of $4,800,000 and cash operating expenses of $400,000. The firm received $80,000 in dividend income and paid $50,000 in dividends to its shareholders. Costs of goods sold came to $1,600,000 and the firm had $600,000 in depreciation expense. Your firm has $900,000 in long-term debt outstanding with a 5% interest rate. Calculate the firm’s tax liability.
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Ответ:
The firm’s tax liability at 21% = $469350
Explanation:
Given that:
Sales = $4,800,000
cash operating expenses = $400,000
Dividend income = $80,000
Payment to shareholders = $50,000
Costs of goods sold = $1,600,000
Depreciation expense of the firm = $600,000
long-term debt outstanding = $900,000
Interest rate = 5% of long-term debt outstanding
= 0.05 × $900,000
= $45000
We are to Calculate the firm’s tax liability.
Since 2018; Tax rate = 21%
So:
The firm’s tax liability at 21% = (Sales + Dividend income - cash operating expenses - Costs of goods sold - Depreciation expense of the firm - Interest rate) × 21 %
The firm’s tax liability at 21% = ( $4,800,000 + $80,000 - $400,000 - $1,600,000 - $600,000 - $45000 ) × 21 %
The firm’s tax liability at 21% = $(4880000 −2645000) × 0.21
The firm’s tax liability at 21% = $2235000 × 0.21
The firm’s tax liability at 21% = $469350
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