If the applicable tax rate is 28% (federal and state combined), and if 70% of dividends received are exempt from taxes, what is the corporation's tax liability?

The Main Street Pub & Grill has the following cash flows:

Operating income:       $300,000
Interest received:         $20,000
Interest paid:               $65,000
Dividends received:       $40,000
Dividends paid:             $50,000

If the applicable tax rate is 28% (federal and state combined), and if 70% of dividends received are exempt from taxes, what is the corporation's tax liability?

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jeff jeffy answered 2 years ago

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