.nterest versus dividend income. Last year, Shering Corporation had pretax carnings from operations of S490,000. In addition, it received $20.000 in income from interest on bonds it held in Zig Manufacturing and received $20,000 in income from dividends on its 5% common stock holding in Tank Industries, Inc. Shering faces a flat 21% tax rate and is eligible for a 50% dividend exclusion on its Tank Industries stock 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. Compare, contrast, and discuss the after-tax amounts resulting from the interest income and dividend income calculated in parts b and c. c. What is the firm's total tax liability for the year? Solution a Calculate the firm's tax on its operating earnings only. Pretax camings Tax rate Tax on operating income $490.000 21% Find the tax and the after-tax amount attributable to the interest income from Zig Manufacturing bonds. $20,000 SO Before-tax interest income Less: Applicable exclusion Taxable amount Tax After-tax amount c. Find the tax and the after-tax amount attributable to the dividend income from the Tank Industries, Inc. common stock. $20,000 Before-tax dividend income Less: Applicable exclusion 50% Taxable amount Tax 21% After-tax amount d Compare, contrast, and discuss the after-tax amounts resulting from the interest income and dividend income calculated in parts band e. e. What is the firm's total tax liability for the year! Taxes on operating earnings (from a.) + Taxes on interest income (from b.) + Taxes on dividend income (from Total tax liability SO so SO