Goodwin Enterprises had a gross profit of $2,500,000 for the year. Operating exp

Question

Goodwin Enterprises had a gross profit of $2,500,000 for the year. Operating expenses and interest expense incurred in that same year were $595,000 and $362,000, respectively. Goodwin had 200,000 shares of common stock and 180,000 shares of preferred stock outstanding. Management declared a $2.50 dividend per share on the common and a $1.50 dividend per share on the preferred. Securities purchased at a cost of $37,500 in a previous year were resold at a price of $50,500. Compute the taxable income and the resulting tax liability for Goodwin Enterprises for the year. <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

Use the following tax rates:

Income Tax rate

$0-$50,000 15%

$50,001-$75,000 25%

$75,001-$100,000 34%

$100,001-$335,000 39%

over $335,001 34%

Explanation / Answer

Tax liability = $529,040

Related Questions

Navigate

• Browse (All)
• Browse G
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.