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Unformatted text preview: (2-6)In its most recent financial statements, Newhouse Inc. reported $50 million of net income and $810 million of retained earnings. The previous retained earnings were $780 million. How much in dividends was paid to shareholders during the year?Beginning Retained Earnings = $780,000,000Net Inc. = $50,000,00050 +780 - x = 810830 - x =810sub "830" from both sides and: x = 20 Shareholders were paid $20 Million in dividends.(2-7)The Talley Corporation had a taxable income of $365,000 from operations after all operating costs but before (1) interest charges of $50,000, (2) dividends received of $15,000, (3) dividends paid of $25,000, and (4) income taxes. What are the firms income tax liability and its after-tax income? What are the companys marginal and average tax rates on taxable income?Dividend Received 70% is excluded and they will be responsible for 30%Op Inc = $365,000(Subtract Interest Charges): $50,000+15,000 * 0.30 = 4,500Total Taxable Income = $319,500Tax brack range = $100,000 - $335,000...
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This note was uploaded on 03/11/2012 for the course ACCT FI515 taught by Professor Schooley during the Spring '12 term at ASU.
- Spring '12