Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. problem 19-33 cardinal corporation, a calendar yea

Problem 19-33 Cardinal Corporation, a calendar year taxpayer, receives dividend income of $250,000 from a...

70.2K

Verified Solution

Question

Accounting

Problem 19-33

Cardinal Corporation, a calendar year taxpayer, receives dividend income of $250,000 from a corporation in which it holds a 10% interest. Cardinal also receives interest income of $35,000 from municipal bonds. (The municipality used the proceeds from the bond issue to construct a library.) Cardinal borrowed funds to purchase the municipal bonds and pays $20,000 of interest on the loan. Excluding these three items, Cardinal's taxable income is $500,000. Cardinal has $150,000 of accumulated E & P at the end of the prior year, and it paid Federal income taxes of $131,250 during the year.

See bottom for the Dividend Received Deduction Table.

a. After these three items are taken into account, Cardinal Corporation's taxable income is $ 625,000. (Correct)

b. Cardinal Corporation's accumulated E & P at the start of next year is $_________. ??

Given: Dividends Received Deduction

Percentage of Ownership by Corporate Shareholder Deduction Percentage

Less than 20% 50%

20% or more (but less than 80%) 65%

80% or more* 100%

*The payor corporation must be a member of an affiliated group with the recipient corporation.

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

On November 1, 2018, Gabriel received $8,400 for services to be rendered over the next 6...

Accounting
Q

In a clinical​ trial, 25 out of 822 patients taking a prescription drug daily complained of...

Statistics
Q

Explain the counter current exchange process done by the vas’s recta and it’s purpose

Medical Sciences
Q

How did black children experience enslavement? How were their lives and work different on a small...

Biology
Q

Exons AND Introns which can be spliced are found in stion 18 When DNA is...

Biology
Q

Solve the exponential equation 3x 9 X

Calculus
Q

How many ways can four be seated in a row c four seats students

Algebra
Q

> Unit 2-RadicalFunctions &Equations? Unit 3-Exponential &4. A population of 1,860,000 decreases 1.5% each year.a....

Algebra
Q

An auditorium has 53 seats in the first row, 59 seats in the second row,...

Algebra
Q

One of Marcels primary financial planning goals includes making lifetime gifts to his children. He...

Accounting
Q

Looking forward to next year, if Baldwin's current cash balance is $28,934,248 and Cash Flows...

Accounting
Q

Which way (if any) does the Supply Curve shift if there is a decrease in...

Accounting