WEEKI TWO

1. Corporate Tax Rates
15%	$0-$50,000

25%	$50,001-$75,000

34%	$75,001-$10,000,000

35%	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

(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 $3.6 million. The combined cost of goods sold and the operating expenses were $1.8million. Also, $405,000 in interest expense was paid during the year. The firm received $6,400

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 $105

per share; its initial cost was $82 per share. The company also sold land that had been recently purchased and had been held for only 4 months. The selling price was

$53,000; the cost was $37, 000.

Calculate the corporation's tax liability by using the corporate tax rate structure.

Calculate the operating profits.

The operating profits are (Round to the nearest dollar.) Answer:

Calculate the taxable dividend income.

The txable dividend income is (Round to the nearest dollar.) ANSWER:

Calculate the short-term capital gain.

The short-term capital gain is. (Round to the nearest dollar.) ANSWER:

Calculate the long-term capital gain.

The long-term capital gain is (Round to the nearest dollar.) ANSWER:

Calculate the taxable ordinary income.

The taxable ordinary income is . (Round to the nearest dollar.) ANSWER:

Calculate the total tax due.

The total tax due is. (Round to the nearest dollar.) ANSWER:

2. Corporate Tax Rates
15%	$0-$50,000

25%	$50,001-$75,000

34%	$75,001-$10,000,000

35%	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

(Computing income taxes)

Sales for L. B. Menielle Inc. during the past year amounted to

$5.17 million. The firm provides parts and supplies for oil field service companies. Gross profits for the year were $3.09 million. Operating expenses totaled $ 1.06 million. The interest income from the securities owned was $18,000. The firm's interest expense was $97, 000.

Calculate the corporation's tax liability by using the corporate tax rate structure.

The corporation's tax liability is (Round to the nearest dollar.) ANSWER:

PLEASE ANSWER EACH (BOTH) QUESTION CORRECTLY AND FULLY!!!