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elena-s [515]
3 years ago
10

In the current year, Tanager Corporation (a calendar year C corporation) had operating income of $480,000 and operating expenses

of $390,000. In addition, Tanager had a long-term capital gain of $55,000 and a short-term capital loss of $40,000.
a. Compute Tanager's taxable income and tax for the year.
Taxable income: $
Income tax: $

b. Assume the same facts except that Tanager's long-term capital gain was $15,000. Compute Tanager's taxable income and tax for the year.
Taxable income: $
Income tax: $
Business
1 answer:
Lera25 [3.4K]3 years ago
5 0

Answer:

a.

Total Taxable Income = $105,000

Tax of the year = $24,200

b.

Total Taxable Income = $65,000

Tax of the year = $11,250

Explanation:

a.

Given

Operating Income = $480,000

Operating Expenses = $390,000

Capital Gain = $55,000

Capital Loss = $40,000

From the above

Taxed Operating Income = Operating Income - Operating Expense

Taxed Operating Income = $480,000 - $390,000

Taxed Operating Income = $90,000

Capital Gain (Loss) = Capital Gain - Capital Loss

Capital Gain (Lossl = $55,000 - $40,000

Capital Gain (Loss) = $15,000

Total Taxable Income = Taxed Operating Income + Capital Gain (Loss)

Total Taxable Income = $90,000 + $15,000

Total Taxable Income = $105,000

Calculating Tax of the year...

For $0 to $50,000; the tax is $7,500

For $50,000 to $75,000; the tax is $6,250

For $75,000 to $100,000; the tax is $8,500

For $100,000 to $335,000; the tax is $1,950

Total Tax of the year = $7,500 + $6,250 + $8,509 + $1,950

Total = $24,200

b.

Given

Operating Income = $480,000

Operating Expenses = $390,000

Capital Gain = $15,000

Capital Loss = $40,000

From the above

Total Taxable Income = Operating Income - Operating Expense

Total Taxable Income = $480,000 - $390,000

Total Taxable Income = $90,000

Capital Gain (Loss) = Capital Gain - Capital Loss

Capital Gain (Lossl = $15,000 - $40,000

Capital Gain (Loss) = -$25,000

Total Taxable Income = Taxed Operating Income + Capital Gain (Loss)

Total Taxable Income = $90,000 - $25,000

Total Taxable Income = $65,000

Calculating Tax of the year...

For $0 to $50,000; the tax is $7,500

For $50,000 to $75,000; the tax is $3,750

Total Tax of the Year = $7,500 + $3,750

Total = $11,250

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Eco Scenario    Dividend     Stock Price  HPR    Prob     Expected HPR

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Normal                       1.2               58        18.4       0.33       6.072

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<u>Calculation Of Standard Deviation</u>

                                      (A)                     (B)           (A) - (B)  

P_{1}          P_{0}       D_{1}       Given return   Exp return       d          p           p.d^{2}

60        50      3            26                     14.49         11.51       0.33      43.718    

58        50      1.2          18.4                   14.49         3.91       0.33      5.045

49        50      0.75      (0.5)                    14.49        14.99     0.33      <u> 74.15</u>

                                                                                         Total p.d^{2} =  122.91

wherein, d = deviation

               p = probability

               Standard Deviation = \sqrt{Total\ p.d^{2} }  = \sqrt{122.91} = 11.08  

<u></u>

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