Concord Poster Company pays income taxes on net income at the rate of 32 percent. The...

Concord Poster Company pays income taxes on net income at the rate of 32 percent. The company pays a bonus to its officers of 8 percent of net income after taxes and pays dividends to its shareholders in the amount of 75 percent of net income after taxes. On January 1, 2017, the company purchased equipment for $450,000. This asset is usually depreciated over a ten-year period. Salvage value is expected to be zero. Assume that the bonus payment is not included as an expense in the calculation of taxable income and reported income.

Assume that sales and operating expense (excluding depreciation) for 2017 are $240,000 and $140,000, respectively.

Compute the tax, bonus, and dividend payment for 2017 if the company uses the straight-line method of depreciation.

Income tax expense		$
Bonus Payment		$
Dividend Payment		$

Expert Solution

income tax expenses = 17600

bonus payment =2992

dividend payment =28050

(note;dividends on common stock are not reported on the income statement since they are not expenses. However, dividends on preferred stock will appear on the income statement as a subtraction from net income in order to report the earnings available for common stock.bonus is not treated as an expense as per the question )

ekkarill92 answered 1 year ago

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