Quiz 1 Solutions for Financial Statements and Taxes
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 $50,000 and paid out common stock dividends of $25,000
to its stockholders. A long-term capital gain of $70,000 was realized during the year along with a capital loss
Based on the above information, answer the following 4 questions:
1. What is Builtrite
s taxable income?
Based on Builtrite
s taxable income, what is their tax liability?