Chapter 2 3 Corporate Taxes The Carolina Corporation Had

51.

Income Statement You have been given the following information for Romeo’s Rockers

Corp.:

Net sales = $5,200,000;

Cost of goods sold = $2,100,000;

Addition to retained earnings = $1,000,000;

Dividends paid to preferred and common stockholders = $400,000;

Interest expense = $200,000.

The firm’s tax rate is 30 percent. What is the depreciation expense for Romeo’s Rockers

Corp.?

52.

Income Statement You have been given the following information for Nicole’s Neckties

Corp.:

Net sales = $2,500,000;

Cost of goods sold = $1,300,000;

Addition to retained earnings = $30,000;

Dividends paid to preferred and common stockholders = $300,000;

Interest expense = $50,000.

The firm’s tax rate is 40 percent. What is the depreciation expense for Nicole’s Neckties

Corp.?

53.

Income Statement You have been given the following information for Sherry’s Sandwich

Corp.:

Net sales = $300,000;

Gross profit = $100,000;

Addition to retained earnings = $30,000;

Dividends paid to preferred and common stockholders = $8,500;

Depreciation expense = $25,000.

The firm’s tax rate is 30 percent. What are the cost of goods sold and the interest expense

for Sherry’s Sandwich Corp.?

54.

Income Statement You have been given the following information for Kaye’s Krumpet

Corp.:

Net sales = $150,000;

Gross profit = $100,000;

Addition to retained earnings = $20,000;

Dividends paid to preferred and common stockholders = $8,000;

Depreciation expense = $50,000.

The firm’s tax rate is 30 percent. What are the cost of goods sold and the interest expense

for Kaye’s Krumpet Corp.?

55.

Income Statement You have been given the following information for Ross’s Rocket

Corp.:

Net sales = $1,000,000;

Gross profit = $400,000;

Addition to retained earnings = $60,000;

Dividends paid to preferred and common stockholders = $90,000;

Depreciation expense = $50,000.

The firm’s tax rate is 40 percent. What are the cost of goods sold and the interest expense

for Ross’s Rocket Corp.?

56.

Corporate Taxes The Carolina Corporation had a 2013 taxable income of $3,000,000 from

operations after all operating costs but before

(1) interest charges of $500,000,

(2) dividends received of $75,000,

(3) dividends paid of $1,000,000, and

(4) income taxes.

Using the tax schedule in Table 2.3, what is Carolina’s income tax liability?

What are Carolina’s average and marginal tax rates on taxable income from operations?

57.

Corporate Taxes The Ohio Corporation had a 2013 taxable income of $50,000,000 from

operations after all operating costs but before

(1) interest charges of $500,000,

(2) dividends received of $45,000,

(3) dividends paid of $10,000,000, and

(4) income taxes.

Using the tax schedule in Table 2.3, what is Ohio’s income tax liability?

What are Ohio’s average and marginal tax rates on taxable income from operations?

58.

Corporate Taxes The Sasnak Corporation had a 2013 taxable income of $4,450,000 from

operations after all operating costs but before

(1) interest charges of $750,000,

(2) dividends received of $900,000,

(3) dividends paid of $500,000, and

(4) income taxes.

Using the tax schedule in Table 2.3, what is Sasnak’s income tax liability?

What are Sasnak’s average and marginal tax rates on taxable income from operations?

59.

Corporate Taxes The AOK Corporation had a 2013 taxable income of $2,200,000 from

operations after all operating costs but before

(1) interest charges of $90,000,

(2) dividends received of $750,000,

(3) dividends paid of $80,000, and

(4) income taxes.

Using the tax schedule in Table 2.3, what is AOK’s income tax liability?

What are AOK’s average and marginal tax rates on taxable income from operations?

60.

Corporate Taxes Suppose that in addition to the $5.5 million of taxable income from

operations, Emily’s Flowers, Inc. received $500,000 of interest on state-issued bonds and

$300,000 of dividends on common stock it owns in Amy’s Iris Bulbs, Inc.

Using the tax schedule in Table 2.3 what is Emily’s Flowers’ income tax liability?

What are Emily’s Flowers’ average and marginal tax rates on total taxable income?

61.

Corporate Taxes Suppose that in addition to the $300,000 of taxable income from

operations, Liam’s Burgers, Inc. received $25,000 of interest on state-issued bonds and

$50,000 of dividends on common stock it owns in Sodas, Inc.

Using the tax schedule in Table 2.3 what is Liam’s income tax liability?

What are Liam’s average and marginal tax rates on total taxable income?

62.

Statement of Cash Flows Fina’s Faucets, Inc. has net cash flows from operating activities

for the last year of $17 million. The income statement shows that net income is $15 million

and depreciation expense is $6 million. During the year, the change in inventory on the

balance sheet was an increase of $4 million, change in accrued wages and taxes was an

increase of $1 million and change in accounts payable was an increase of $1 million. At

the beginning of the year the balance of accounts receivable was $5 million. What was the

end of year balance for accounts receivable?

63.

Statement of Cash Flows Zoe’s Dog Biscuits, Inc. has net cash flows from operating

activities for the last year of $226 million. The income statement shows that net income is

$150 million and depreciation expense is $85 million. During the year, the change in

inventory on the balance sheet was an increase of $14 million, change in accrued wages

and taxes was an increase of $15 million and change in accounts payable was an increase

of $10 million. At the beginning of the year the balance of accounts receivable was $45

million. What was the end of year balance for accounts receivable?

64.

Statement of Cash Flows Nickolas’s Nut Farms, Inc. has net cash flows from operating

activities for the last year of $25 million. The income statement shows that net income is

$15 million and depreciation expense is $6 million. During the year, the change in

inventory on the balance sheet was a decrease of $4 million, change in accrued wages and

taxes was a decrease of $1 million and change in accounts payable was a decrease of $1

million. At the beginning of the year the balance of accounts receivable was $5 million.

What was the end of year balance for accounts receivable?