Corporate Tax Liability

The Talley Corporation had taxable operating income of $435,000 (i.e., earnings from operating revenues minus all operating costs). Talley also had (1) interest charges of $40,000, (2) dividends received of $25,000, and (3) dividends paid of $35,000. Its federal tax rate was 21% (ignore any possible state corporate taxes). Recall that 50% of dividends received are tax exempt.

What is the firms taxable income? Round your answer to the nearest dollar.

$ 407,500

What is the tax expense? Round your answers to the nearest dollar.

$ 85,575

What is the after-tax income? Round your answers to the nearest dollar.

$ ???