AnhNguyenFI515Week2Lab - AnhNguyenFI515Week2Lab 3-2 The...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
AnhNguyenFI515Week2Lab 3-2 The four financial statements contained in most annual reports are the balance sheet, income statement, statement of retained earnings, and statement of cash flows. 3-3 When a company reports $20 million of retained earnings on its balance sheet, it could not be declared that amount as cash dividend because the $20 million of retained earnings would probably not be held as cash. The retained earnings figure represents the reinvestment of earnings by the firm. Consequently, the $20 million would be an investment in all of the firm’s assets. 3-7 Income $365,000 Less Interest deduction (50,000) Plus: Dividends received (30%*15000) 4,500 Taxable income $319,500 (According to the federal income tax system , a corporation are excluded 70% of dividends received from taxes; so that taxable dividends = $15,000(1 - 0.70) = $4,500) Tax = $22,250 + ($319,500 - $100,000)(0.39) = $22,250 + $85,605 = $107,855. After-tax income:
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 06/15/2011 for the course FI515 FI515 taught by Professor Fi515 during the Spring '10 term at Keller Graduate School of Management.

Page1 / 3

AnhNguyenFI515Week2Lab - AnhNguyenFI515Week2Lab 3-2 The...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online