In 2016, Saratoga Company had the following financial data: Operating income $320,000 Interest received $50,000 Interest paid $90,000 Dividend received $100,000 Dividend paid $150,000 Dividend of $100,000 was received from Findlay Inc. which is one of the companies that Saratoga company invest. As of the end of 2016, Saratoga Company owns 35% of Findlay, Inc.
Using the corporate tax rate table given below, what was the company’s tax Liability (just federal corporate income tax) for the year 2008?
335,000 - 10,000,000 34% 113,900 + .34x(inc>335,000)
Answer:
$78,200
Explanation:
From the given information:
Operating income = $320,000
Interest received = $50,000
Interest paid = $90000
Dividend received = $100000
Dividend paid = $150,000
Therefore:
Saratoga Company Total Income = Operating income + Interest Received + Dividend Received - Interest Paid - Dividend paid
Saratoga Company Total Income = $320,000 + $50,000 + $100,000 - $90,000 - $ 150,000
Saratoga Company Total Income = $470000 - $ 240000
Saratoga Company Total Income = $230,000
According to the table given ;
The table tax percentage = 34 %
= $230,000 × 0.34
= $78,200
