In: Accounting
In the current year, the Best Corporation had sales revenue of $380,000, operating expenses of $390,000, and charitable contributions totaling $9,000. In addition, the company received a $50,000 cash dividend from another domestic corporation, a company in which it held a 15 percent ownership interest. What is Best Corporation’s taxable income?
Particulars | Amount ($) | explanation |
Sales Revenue | 380,000 | |
Add dividend | 25,000 |
dividend received = 50,000 allowable deduction = 50% dividend taxable = 25,000 |
Total Income | 405,000 | |
Less Operating Expenses | (390,000) | Allowed to deduct as business expense as per tax laws |
Less charitable deduction | (9,000) | |
Net Taxable income | 6,000 |
Taxable income of Best corporation = $6,000