Interest versus dividend income During the year just ended, Shering Distributors

Question

Interest versus dividend income During the year just ended, Shering Distributors, Inc, had pretax earnings from operations of $485,000. In addtion, during the year t receved $25,000 n income rom r er st on bords hel in Zig Manufacturing and rece ed S2 000 r cor e om dive ends onts 5% co non stek ek ng n ark aa e,he She ngs n the 34% tax bracket and is eligble for a 70% dividend exdusion on its Tank industries stock. a. Calculate the firm's tax on its operating earnings only ind the tax and the after-tax amount attributable to the interest income from Zig Manufacturing bonds C Find the tax and the afer-tax amount attributable to the dividend income from the Tank Industries, Inc, common stock Compare, contrast, and discuss the after -tax amounts resulting from the interest income and dividend income calculated in parts What is the firm's total tax lability for the year? Tax (34%) After-tax amount C. Complete the table below to compute the tax and the after-tax aount attibutable to the dvidend income (Round to the nearest dolar) Dividend Income Before-tax amount Less: Applicable exclusion Taxable amount Tax (34%) After-tax amount

Explanation / Answer

I think they are looking answer for c part
c) dividend income:
Before tax amount=25000
Less:applicable exclusion=70%*25000=175000
Taxable amount=50000
Tax(34%)=34%*50000=17000
After tax amount=50000-17000=33000

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