Builtrite had sales of $700,000 and COGS of $280,000. In addition, operating expenses were calculated at 25% of sales. Builtrite also received dividends of $40,000 and paid out common stock dividends of $25,000 to its stockholders. A long-term capital gain of $55,000 was realized during the year along with a capital loss of $70,000

1.What is Builtrites taxable income?

2.Based on their taxable income, what is Builtrites tax liability?

3.If we add to our problem that Builtrite also had $20,000 in interest expense, how much would this interest expense cost Builtrite after taxes?

4. If Builtrite had experienced a long-term capital loss of $30,000 instead of the $70,000 long-term capital loss stated in the problem, (in addition to the $55,000 long-term capital gain) which of the following is correct:

5.

1. (This problem is not related to the above problem) Last yearBuiltritehad retained earnings of $140,000. This year,Builtritehadnet profits after taxesof $65,000 and paid a preferred dividend of $25,000.Builtritehadalso received common stock dividends of $10,000 from stock owned. What isBuiltritesnew level of retained earnings?

   		$190,000
   		$170,000
   		$180,000
   		$200,000