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Andrews Corporation has income from operations of $229,000

Accounting

Andrews Corporation has income from operations of $229,000. In addition, it received interest income of $22,900 and received dividend income of $30,100 from another corporation. Finally, it paid $11,800 of interest income to its bondholders and paid $47,100 of dividends to its common stockholders. Using the 2013 corporate tax schedule, what is the firm’s federal income tax? Round your intermediated and final answers to the nearest cent.

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Solution: Calculation pof Taxable Income:-

                                                                                                         (Amount in $)

Particulrs Amount Amount
Income From Operation   2,29,000.00
Add: Interest Income 22900.00  
Add: Dividend (30% of 30100) 9030.00 31930.00
Less: Interest Paid   (11800.00)
Net Taxable Income   249130.00

Calculation of Federal Income Tax:-

As per Income Tax Schedule The taxable income is fall in bracket                           ($ 100000 to $ 335000). Hence Tax is:-

22500 Plus 39% of (249130 Less 100000) = 22500+58160.70 = 80660.7 $ Or 80661.00 (Roud Off ) Figure.

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