In addition to that, you know the following facts about firms operations throughout the year Golden Cup revenues for the year includes the following Domestic revenues $160,000 International revenues $80,000 Out of Golden Cups sales, cost of sales and direct labor is 50 of annual revenues Because of the strong competition that it faces, Golden Cup has a generous marketing plan Golden Cup signed a contract with the marketing planet Inc by which the marketing agency will be responsible for Golden Cup marketing for five years period started this year The contract costs Golden Cup $100,000 that were paid up front, however the company thinks this plan will affect its sales evenly over the five years period Golden Cup also spends $30,000 in the form of general and administrative expenses per year Golden Cup depreciable assets historical value is $40,000 and is depreciated on a straight line basis over 10 years Golden Cup pays interest rate of 10 on its Long term debt outstanding Out of the years net income, Golden Cup is planning to repay $30,000 to its shareholders in the form of cash dividends The company currently has 60,000 shares outstanding Tax rate is 21 b Please use the U S corporate tax rates to calculate Golden Cup tax liability c What is the marginal tax rate of Golden Cup Consolidated Income Statement Golden Cup As of Dec 31st, 2018 Show your workings here Revenues Cost of goods sold Gross margin Marketing expenses ( ) General and administrative expenses ( ) Depreciation EBIT $160,000 $80,000 50 of 240,000 Revenue CGS $240,000 $120,000 100,000 5 Given Final answer here $240,000 ($120,000) 120,000 ($20,000) ($30,000) ($4,000) $66,000 Interest expenses EBT ( ) Tax expenses Net income Dividends Additions to Retained Earnings 40,000 10 years GM Marketing Expenses General and Admin Expenses Depreciation 120,000 ($20,000) ($30,000) (54,000) 40,000 10 EBIT Interest $66,000 ($4,000) Tax Rate 21 EBT (0 21) EBT Tax Expenses $62,000 ($13,020) Given Net income Dividends $48,980 $30,000 ($4,000) $62,000 ($13,020) $48,980 $30,000 $18,980

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In addition to that, you know the following facts about firms operations throughout the year: Golden Cup revenues for the year includes the following: Domestic

In addition to that, you know the following facts about firms operations throughout the year:

Golden Cup revenues for the year includes the following: Domestic revenues $160,000. International revenues $80,000. Out of Golden Cups sales, cost of sales and direct labor is 50% of annual revenues.

Because of the strong competition that it faces, Golden Cup has a generous marketing plan. Golden Cup signed a contract with the marketing planet Inc. by which the marketing agency will be responsible for Golden Cup marketing for five years period started this year. The contract costs Golden Cup $100,000 that were paid up front, however the company thinks this plan will affect its sales evenly over the five years period. Golden Cup also spends $30,000 in the form of general and administrative expenses per year. Golden Cup depreciable assets historical value is $40,000 and is depreciated on a straight line basis over 10 years.

Golden Cup pays interest rate of 10% on its Long-term debt outstanding.

Out of the years net income, Golden Cup is planning to repay $30,000 to its shareholders in the form of cash dividends. The company currently has 60,000 shares outstanding
Tax rate is 21%

b- Please use the U.S corporate tax rates to calculate Golden Cup tax liability.

c- What is the marginal tax rate of Golden Cup?

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Consolidated Income Statement Golden Cup. As of Dec 31st, 2018 Show your workings here Revenues Cost of goods sold Gross margin Marketing expenses (-) General and administrative expenses (-) Depreciation EBIT $160,000+ $80,000 50% of 240,000 Revenue - CGS = $240,000 --$120,000 100,000/5 Given Final answer here $240,000 ($120,000) 120,000 ($20,000) ($30,000) ($4,000) $66,000 Interest expenses EBT (-) Tax expenses Net income Dividends Additions to Retained Earnings 40,000/10 years GM-Marketing Expenses-General and Admin Expenses-Depreciation = 120,000 - ($20,000) - ($30,000) (54,000) 40,000 * 10% EBIT-Interest = $66,000 - ($4,000) Tax Rate-21% = EBT * (0.21) EBT-Tax Expenses = $62,000 - ($13,020) Given Net income-Dividends = $48,980 - $30,000 ($4,000) $62,000 ($13,020) $48,980 $30,000 $18,980