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In: Accounting

In the current year, the Best Corporation had sales revenue of $380,000, operating expenses of $390,000,...

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?

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Expert Solution

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


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