IncomeTaxExamples - Chapter 2 – Income Tax Examples Space...

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Unformatted text preview: Chapter 2 – Income Tax Examples Space Cow Computer has sales of $32 million, cost of goods sold at 60% of sales, cash operating expenses of $2.4 million, and $1.4 million in depreciation expense. The firm pays $1,140,000 in interest to bondholders and $500,000 in dividends to its common stock holders. Calculate the firm’s tax liability. Sales $ × 15% = Cost of Goods Sold × 25% = Operating Expense × 34% = Depreciation Expense × 39% = EBIT × 34% = Interest expense × 35% = Taxable income × 38% = × 35% = What about the dividends they paid? Total Tax: ••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• ••••••• Barn Yard Brewery has sales of $40 million, cost of goods sold of $19.5 million, cash operating expenses of $3 million, Barn Yard Brewery has sales of $40 million, cost of goods sold of $19....
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This note was uploaded on 10/11/2010 for the course F 61364G911 taught by Professor Susancrain during the Spring '10 term at Missouri State University-Springfield.

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