Alfredo Ross

Business

20 November, 06:51

Lintner Beverage Corp. reported the following information from their financial statements:

Operating income (EBIT) = $14,000,000

Interest payments on long-term debt = $1,750,000

Dividend income = $1,000,000

Calculate Lintner's total tax liability using the corporate tax schedule below:

Taxable Income Tax on Base of Bracket Percentage on Excess above Base

$0-$50,000 $0 15%

$50,000-$75,000 7,500 25

$75,000-$100,000 13,750 34

$100,000-$335,000 22,250 39

$335,000-$10,000,000 113,900 34

$10,000,000-$15,000,000 3,400,000 35

$15,000,000-$18,333,333 5,150,000 38

Over $18,333,333 6,416,667 35

Assume a 70% dividend exclusion for tax on dividends.

a. $5,236,850

b. $4,077,875

c. $4,292,500

d. $4,378,350

e. $3,348,150