Q #1

 

  

(Corporate income tax) The William B. Waugh Corporation is a regional Toyota dealer. The firm sells new and used trucks and is actively involved in the parts business. During the most recent year the company generated sales of $3.7 million. The combined cost of goods sold and the operating expenses were $2.5 million. Also, $407,000 in interest expense was paid during the year. The firm received $6,500 during the year in dividend income from 1,000 shares of common stock that had been purchased 3 years previously. However, the stock was sold toward the end of the year for $101 per share; its initial cost was $75 per share. The company also sold land that had been recently purchased and had been held for only 4 months. The selling price was $52,000; the cost was $44,000. Calculate the corporation's tax liability by using the corporate tax rate structure in the popup window, Calculate the operating profits. The operating profits are $. (Round to the nearest dollar.) Calculate the taxable dividend income. The txable dividend income is $. (Round to the nearest dollar.) Calculate the short-term capital gain. The short-term capital gain is $. (Round to the nearest dollar.) Calculate the long-term capital gain. The long-term capital gain is $. (Round to the nearest dollar.) Calculate the taxable ordinary income. The taxable ordinary income is $. (Round to the nearest dollar.) Calculate the total tax due. The total tax due is $. (Round to the nearest dollar.) Data table Corporate Tax Rates 15% 25% 34% 35% $0-$50,000 $50,001-$75,000 $75,001-$10,000,000 over $10,000,000 Additional surtax 5% on income between $100,000 and $335,000 3% on income between $15,000,000 and $18,333,333 (Click on the icon located on the top-right corner of the data table above in order to copy its contents into a spreadsheet.) Print Done X