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Unformatted text preview: ture: Regulation 3 Total dividends $ 19,200 Operating expenses include the following: • Bonus of $5,000 paid to Ral's sales manager on January 31, 1994. This bonus was based on a percentage of Ral's 1993 sales and was computed on January 25, 1994, under a formula in effect in 1993. • Estimate of $10,000 for bad debts. Actual bad debts for the year amounted to $8,000. No pre-1989 bad debt reserve remained on Ral's books since January 1, 1989. • Keyman life insurance premiums of $4,000. Ral is the beneficiary of the policies. • State income taxes of $12,000. During 1993, Ral made estimated federal income tax payments of $35,000. These payments were debited to prepaid tax expense on Ral's books. Ral does not exercise significant influence over Clove and accordingly did not use the equity method of accounting for this investment. Ral declared and paid dividends of $11,000 during 1993. Corporate income tax rates are as follows: Taxable income but not over over $0 $50,000 50,000 75,000 75,000 100,000 100,000 335,000 335,000 _______ % on + excess 15% 25% 34% 39% 34% Pay $0 7,500 13,750 22,250 113,900 Of the amount over $0 50,000 75,000 100,000 335,000 Ral was not subject to the alternative minimum tax in 1993. Determine the following taxable or deductible amounts for Ral Corp...
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This note was uploaded on 06/14/2013 for the course ACCOUNTING Regulation taught by Professor Becker during the Fall '10 term at Keller Graduate School of Management.

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