Accounting for Decision Makers Project 5 - Taxes Information The following information is from Robin Hood Inc. $ (400,000) $ 150,000 $ (200,000) Advertising Expenses Capital Gains Capital Losses (this year) Capital Losses (prior year) Cost of Goods Sold Dividend "A" income Dividend "B" income Dividend "C" income General and Admin Expenses Interest Expense Sales $ (4,000,000) $ 200,000 $ 100,000 $ 50,000 $ (1,300,000) $ (500,000) $9,000,000 1. In addition, Robin purchased equipment at the beginning of the year for $750,000. The equipment has a useful life and a salvage value of 14 years and $50,000 respectively. 2. Robin Hood Inc. has varying ownership interest in the 3 companies listed below and receives dividend income from each company. Robin owns 15% of Company "A" Robin owns 45% of Company "B" Robin owns 90% of Company "C" 3. How much of Robin's capital gains are taxable? 4. Calculate Robin's interest expense deduction assuming the following: Adjusted taxable income $ 35,000,000 Business interest income $ 1,000,000 Business interest expense $ 15,000,000 5. How much of the dividend income is taxable? 6. Assuming taxable income is $3,500,000, calculate Robin's tax liability. Accounting for Decision Makers Project 5 - Taxes Information The following information is from Robin Hood Inc. $ (400,000) $ 150,000 $ (200,000) Advertising Expenses Capital Gains Capital Losses (this year) Capital Losses (prior year) Cost of Goods Sold Dividend "A" income Dividend "B" income Dividend "C" income General and Admin Expenses Interest Expense Sales $ (4,000,000) $ 200,000 $ 100,000 $ 50,000 $ (1,300,000) $ (500,000) $9,000,000 1. In addition, Robin purchased equipment at the beginning of the year for $750,000. The equipment has a useful life and a salvage value of 14 years and $50,000 respectively. 2. Robin Hood Inc. has varying ownership interest in the 3 companies listed below and receives dividend income from each company. Robin owns 15% of Company "A" Robin owns 45% of Company "B" Robin owns 90% of Company "C" 3. How much of Robin's capital gains are taxable? 4. Calculate Robin's interest expense deduction assuming the following: Adjusted taxable income $ 35,000,000 Business interest income $ 1,000,000 Business interest expense $ 15,000,000 5. How much of the dividend income is taxable? 6. Assuming taxable income is $3,500,000, calculate Robin's tax liability