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.)

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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 1 year ago

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