Fi515 Homework Week1

Topics: Progressive tax, Taxation, Tax Pages: 15 (943 words) Published: March 23, 2013
|(2-6) Statement of Retained Earnings | | | | | |In its most recent financial statements, Newhouse Inc. reported $50 million of net income and $810 million of retained earnings. The previous retained earnings | | |were $780 million. How much in dividends was paid to shareholders during the year? (Brigham 79) | | | | | | | | | |Previous retained earnings balance |780,000,000 | | | | | |Current retained earnings balance |810,000,000 | | | | | |Current net income |50,000,000 | | | | | |Common dividends |TBD | | | | | | | | | | | | | | | | | | | |Formula |New Balance retained earning = |Previous Balance |net income – |Dividend paid | | | | |retained earning + | | | | | |Dividend paid = |Previous Balance |net income – |New Balance retained earning | | | | |retained earning + | | | | | | | | | | | | |Dividend paid = |780 million+ |50 million- |810 million | | |Answer: |Dividend paid = |20,000,000 | | | | | | | | | | | |  |  |  |  |  |  | | | | | | | | | (2-7) Corporate Tax Liability | | | | | | |The Talley Corporation had a taxable income of $365,000 from operations after all operating costs but before | | |(1) interest charges of $50,000, (2) dividends received of $15,000, (3) dividends paid of $25,000, and (4) income taxes....
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