Interest versus dividend income During the year just ended, Shering Distributors, Inc., had pretax earnings from operations of

$ 484 comma 000$484,000.

In addition, during the year it received

$ 29 comma 000$29,000

in income from interest on bonds it held in Zig Manufacturing and received

$ 29 comma 000$29,000

in income from dividends on its

6 %6%

common stock holding in Tank Industries, Inc. Shering is in the

40 %40%

tax bracket and is eligible for a

70 %70%

dividend exclusion on its Tank Industries stock.

a. Calculate the firm's tax on its operating earnings only.

b. Find the tax and the after-tax amount attributable to the interest income from Zig Manufacturing bonds.

c. Find the tax and the after-tax amount attributable to the dividend income from the Tank Industries, Inc., common stock.

d. Compare, contrast, and discuss the after-tax amounts resulting from the interest income and dividend income calculated in parts b. and c.