The Dakota Corporation had a 2015 taxable income of $17,000,000 from operations after all operating costs...

The Dakota Corporation had a 2015 taxable income of $17,000,000 from operations after all operating costs but before (1) interest charges of $3,500,000, (2) dividends received of $290,000, (3) dividends paid of $2,050,000, and (4) income taxes.

a. Use the tax schedule in Table 2.3 to calculate Dakota’s income tax liability. (Round your answer to the nearest dollar amount.)

Expert Solution


(a)	Taxable Income =
	EBIT =		17000000
	Less: Interest		3500000
	Add: Net dividend received	290000 * 30%	87000.00
			13587000.00

	Now use the table provided to find the range in which this taxable income lies i.e.		13587000.00
	Tax Liability =	Tax on base income + (13587000- Base income ) x Tax rate

	If you have trouble with this computation please post the table in comments

jeff jeffy answered 2 years ago

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