Question

During the year merely ended Shering Distributors Inc had pretax earnings from operations of 490,000. Furthermore during the year it received 20,000 in income from interest on bonds it held in Zig manufacturing and received 20, 000 in income from dividends on its 5% common stock holding in Tank indusries inc. Sherring is in the 40% tax bracket as well as is eligible for 70% dividend exclusion on its Tank industry stock

1- Calculate the firm tax on its operating earnings only

2- find the tax as well as the after tax amount attributable to the interest income from zig manufacturing bonds

3- find the tax as well as the after tax amount attributable to the dividend income from tank industries inc common stock

4- Associate, contrast as well as discuss the after tax amt resulting from the interest income as well as dividend income calculated in parts 2 and 3

5- what is the firm total liability for the year