Question

3. During the year just end, Shovon Distributors Inc had Operating Profit from operations of $500,000. Company has a loan outstanding of Tk. 100,000 and has to pay interest of (5%+ last digit of your ID). In addition, during the year it received $25,000 in income from interest on bonds it held in Dihan Manufacturing and received $15,000 in income from dividends on its 5% common stock holding in Nidaat Industries, Inc. Shovon is eligible for a (15% +last digit of your ID) dividend exclusion on its Tank Industries stock. Suppose the tax bracket of Shovon varies from 40%.

i. Calculate the firm’s tax on its operating earnings only.

ii. Find the tax and the after-tax amount attributable to the interest income from Dihan Manufacturing bonds.

iii. Find the tax and the after-tax amount attributable to the dividend income from the Nidaat Industries, Inc. common stock.

iv. What is the firm’s total tax liability for the year?​

Answer 1

Answer:

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Step-by-step explanation:

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