Interest versus dividend income During the year just ended, Shering Distributors, Inc, had pretax earnings...
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Interest versus dividend income During the year just ended, Shering Distributors, Inc, had pretax earnings from operations of $486,000. In addtion, during the year t received S30 00 r income from r terest on bonds it held in g Man ta ur ng and rece ved S30 0 in income rom d ends on its 4% ammon stock holdin r Tank i tres inc ng s n the 40% tax bracket and is eligible for a 70% dividend exclusion on its Tank Industries stock a. Calculate the firm's tax on its operating earnings only b. Find the tax and the after-tax amount attributable to the interest income from Zig Manufacturing bonds c. Find the tax and the after-tax amount attributable to the dividend income from the Tank Industries, Inc., common stock d. Compare, contrast, and discuss the after-tax amounts resulting from the interest income and dividend income calculated in parts b. and c. e, what is the firm's total tax liability for the year? c. Complete the table below to compute the tax and the after-tax amount attributable to the dividend income. (Round to the nearest dollar) Dividend Income Before-tax amount Less: Applicable exclusion Taxable amount Tax (40%) Ater-tax amount
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