Finance/Accounting Question. How do you calculate?

Question

Yes Corporation has sales of $15,000,000, cost of goods sold of $6,000,000, selling and administrative costs of $2,500,000, and depreciation expense of $500,000. Yes also paid $200,000 of interest expense and received $150,000 of dividends from other corporations. Yes had a long-term capital gain of $400,000 and paid dividends of $250,000 to its common shareholders.

What is the Net Income?

What is the federal income tax liability?

Please show calculations.

Answer 1

You definitely need professional accounnting help.  Good luck

Answer 2

Net income:

Sales - $15M

Less COGS - (6M)

Less G&A - (2.5M)

Less Depr - (.5M)

Less Interest - (.2M)

Plus Dividends (assume 30% are taxable) - 45k

Plus Capital gain - 400k

So...I'm going to go with 6,245,000 as taxable income

Which would produce tax of $2,123,300 at 34%

Answer 3

This must be a text book question from a college course.  The numbers are too perfect & there are way too many variables that you haven't addressed that can result in differences between book income and taxable income.