Business, 19.07.2020 01:01 siddhi50

Builtrite had sales of $900,000 and COGS of $280,000. In addition, operating expenses were calculated at 25% of sales. Builtrite also received dividends of $50,000 and paid out common stock dividends of $25,000 to its stockholders. A long-term capital gain of $70,000 was realized during the year along with a capital loss of $50,000. Required:
a. What is Builtrite’s taxable income?
b. Based on their taxable income, what is Builtrite’s tax liability?
c. If we add to our problem that Builtrite also had $30,000 in interest expense, how much would this interest expense cost Builtrite after taxes?
d. Last year Builtrite had retained earnings of $140,000. This year, Builtrite had true net profits after taxes of $75,000 which includes common stock dividends received of $10,000. Builtrite also paid a preferred dividend of $35,000. What is Builtrite’s new level of retained earnings?

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Builtrite had sales of $900,000 and COGS of $280,000. In addition, operating expenses were calculate...

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