Question
I need help how to calculate federal income tax ??????/ Olive Corporation was formed and began operations on January 1, 2018. The corporation's income statement
I need help how to calculate federal income tax ??????/
Olive Corporation was formed and began operations on January 1, 2018. The corporation's income statement for the year and the balance sheet at year-end are presented below.
The Olive Corporation Income Statement for the Year Ended December 31, 2018Gross income from operations$270,000Qualified dividends received from a 35 percent-owned domestic corporation20,000Total gross income$290,000Cost of goods sold(110,000)Total income$180,000Other expenses:Compensation of officers$77,000 Salaries and wages30,000 Bad debts (direct charge-offs)9,000 Repairs3,000 Depreciation for book and tax purposes10,000 Advertising2,000 Payroll taxes16,000 Total other expenses(147,000)Net income (before federal income tax expense)$33,000The Olive Corporation Balance Sheet as of December 31, 2018Assets:Cash$30,000 Accounts receivable20,000 Inventory (at cost)70,000 Equipment90,000 Less: accumulated depreciation(10,000) Total assets $200,000Liabilities and owners' equity: Accounts payable$ 6,200 Note payable (due in 10 years)85,000 Common stock80,000 Retained earnings28,800 Total liabilities and owners' equity$200,000
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