QUIZ-Corporate Taxes and and Financial Statements
Builtrite had sales of $700,000 and COGS of $280,000.
In addition, operating
expenses were calculated at 25% of sales.
Builtrite also received dividends of
$40,000 and paid out common stock dividends of $25,000 to its stockholders.
long-term capital gain of $55,000 was realized during the year along with a capital
loss of $70,000
Based on the above information, answer the following 4 questions:
What is Builtrite’s taxable income?
Based on their taxable income, what is Builtrite’s tax liability?
If we add to our problem that Builtrite also had $20,000 in interest expense, how
much would this interest expense cost Builtrite after taxes?
If Builtrite had experienced a long-term capital loss of $30,000 instead of the
$70,000 long-term capital loss stated in the problem, (in addition to the $55,000
long-term capital gain) which of the following is correct:
(This problem is not related to the above problem) Last year Builtrite had retained
earnings of $140,000.
This year, Builtrite had net profits after taxes of $65,000 and
paid a preferred dividend of $25,000.
Builtrite also received common stock
dividends of $10,000 from stock owned.
What is Builtrite’s new level of retained
Quiz-Time Value of Money
Barry Cuda would like to save $175,000 over the next 20 years. He will assume his
account will earn 7% annually.
If Barry decides to make a single deposit into his
how much would he need to deposit today?