Interest versus dividend income Depot Logistics Inc. has declared pretax income from its operations for the year of $560,000. In addition, it also received an interest payment of $40,000 on bond stock held in Warehouse PLC. During the year. they also received $40,000 in income from dividends on its 20% common stock holding in Zephir PLC. Depot Logistics is in the 30% tax bracket and is eligible for a 70% dividend exclusion on its Zephir PLC stock. a. Calculate the tax liability for Depot L b. Calculate the tax and after-tay ncom on it operating income. c. Find the tax and after-tax income owing to the dividend income received on account of common stock, from Zephir PLC d. Compare and comment on the after-tax attributable to the interest income received on account of bond stock, from Warehouse PLC. r the year? a. The tax liability for Depot Logistics on its operating income is $
Interest versus dividend income Depot Logistics Inc. has declared pretax income from its operations for the year of $560,000. In addition, it also received an interest payment of $40,000 on bond stock held in Warehouse PLC. During the year. they also received $40,000 in income from dividends on its 20% common stock holding in Zephir PLC. Depot Logistics is in the 30% tax bracket and is eligible for a 70% dividend exclusion on its Zephir PLC stock. a. Calculate the tax liability for Depot L b. Calculate the tax and after-tay ncom on it operating income. c. Find the tax and after-tax income owing to the dividend income received on account of common stock, from Zephir PLC d. Compare and comment on the after-tax attributable to the interest income received on account of bond stock, from Warehouse PLC. r the year? a. The tax liability for Depot Logistics on its operating income is $
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter21: Corporations: Taxes, Earnings, Distributions, And The Statement Of Retained Earnings
Section: Chapter Questions
Problem 8SPA
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