Dews, Inc., an S corporation in Norfolk, Virginia, has revenues of $700,000, taxable interest of $580,000, operating expenses of $350,000, and deductions attributable to the interest income of $240,000. Calculate any passive investment income penalty tax

Question:

Dews, Inc., an S corporation in Norfolk, Virginia, has revenues of $700,000, taxable interest of $580,000, operating expenses of $350,000, and deductions attributable to the interest income of $240,000. Calculate any passive investment income penalty tax payable by this corporation.

Tax:

Tax is the money owed to the government based on the income, expenditure of the individuals or the corporations. The tax is a revenue for the government used for national development and social welfare.

Answer and Explanation:

Become a Study.com member to unlock this answer! Create your account

View this answer

See full answer below.

Learn more about this topic:

Tax Structures: Types & Concept

from

Chapter 5 / Lesson 9

21K

Learn about tax structures and see how they work. Explore three types of tax structures, including regressive tax, progressive tax, and proportional tax structures.

Related to this Question

Pepper, Inc., an S corporation in Norfolk, Virginia, has revenues of $450,000, taxable interest of $425,000, operating expenses of $150,000, and deductions attributable to the interest income of $70,000.
a) An S corporation with AEP in 2013 records operating revenue of $420,000, taxable interest income of $260,000, and deductions attributable to the interest of $150,000. What is the passive income penalty tax payable, if any? b) What possible advice woul
Latesha, a single taxpayer, had the following income and deductions for the tax year 2019: Income: Salary $100,000 Business Income 25,000 Interest income from taxable bonds 10,000 Tax-exempt bond interest 5,000 Total income 140,000 Deductions: Business e
For this calendar year, The Olsen Machine Company's net income is $1,000,000, its interest expense is $275,000, and its income taxes expense is $225,000. Calculate Olsen s times interest earned ratio to four decimal places.
Loriann's, a single taxpayer, had the following income and deductions for the tax year: Income: Salary $61,000 Business income $30,000 Interest income from taxable bonds $15,000 Tax-exempt bond interest $3,500 Total income $109,500 Deductions: Business
In a recent year, Pina Colada Corp. had a net income of $151,000, interest expense of $28,500, and income tax expense of $41,300. What was Pina Colada Corp.'s times interest earned (rounded) for the year? a. 6.30 b. 5.30 c. 6.75 d. 7.75
In a recent year Pina Colada Corp. had net income of $151000, interest expense of $28500, and income tax expense of $41300. What was Pina Colada Corp.'s times interest earned (rounded) for the year? a. 5.30 b. 6.75 c. 7.75 d. 6.30
Dharma Supply has earnings before interest and taxes (EBIT) of $543,000, interest expenses of $273,000, and faces a corporate tax rate of 35%. a. What is Dharma Supply's net income? b. What would Dharma's net income be if it didn't have any debt? c. Wh
The following information was obtained from Quayle Company's income statement: Income before Interest and Income Tax Expense - $690,000 ; Interest Expense 77,500 ; Income before Income Tax Expense - 6
Martin and Joanne filed a joint tax return. Their combined income and deductions are $150,000 salary income, $4,500 municipal bond interest income, $5,000 long-term capital gains, and $20,000 allowable itemized deductions. Calculate their taxable income a
The beginning balance in Swan, Inc.'s OAA is $6,700, and the following transactions occur. |Depreciation recapture income |$21,600 |Payroll tax penalty |(4,200) |Tax exempt interest income |4,012
In a recent year, Marigold Corp. had a net income of $162,000, an interest expense of $28,100, and an income tax expense of $41,300. What was Marigold Corp.'s times interest earned (rounded) for the year?
The times-interest-earned ratio is calculated as: a) profit before tax divided by interest expense. b) net income divided by interest expense. c) earnings before interest and tax divided by interest expense. d) income tax expense plus interest expense div
Alex files a tax return for the 2010 tax year. His adjusted gross income is $50,000. He had a net investment income of $9,000. In 2010, he had the following interest expenses.
Gary and Tracy file a joint return for the 2012 tax year. Their adjusted gross income is $65,000. They had net investment income of $9,000. In 2012, they had the following interest expenses. \\ - Personal credit card interest: $3,000. - Home mortgag
Tax Rates. Latesha, a single taxpayer, had the following income and deductions for the tax year 2015: Income: Salary $80,000 Business Income 25,000 Interest income from bonds 10,000 Tax-exempt bo
PMF, Inc. is equally likely to have EBIT this coming year of $0 million, $10 million, or $20 million. Its corporate tax rate is 38%, and investors pay a 15% tax rate on income from equity and a 45% tax rate on interest income. a. What is the effective tax
Dharma Supply has earnings before interest and taxes (EBIT) of $566,000, interest expenses of $317,000, and faces a corporate tax rate of 34 percent. a. What is Dharma Supply's net income? b. What would Dharma's net income be if it didn't have any debt (a
At the beginning of 2012, Annie, Inc. has a deferred tax asset of 7,500 and deferred tax liability of 10,500. In 2012, pretax financial income was 826,000 and the tax rate was 35%. \\ Pretax income included: Interest income from municipal bonds 15,000
Collin Products received notice of a $27,600 income tax deficiency plus $3,900 interest. The deficiency is related to an incorrect method of accounting for business inventory. Compute the after-tax cost of the $3,900 interest payment assuming that Collin
Ms. Kerry, who itemized deductions on Schedule A, paid $15,000 interest on funds borrowed to acquire taxable bonds. She also paid $660 of management fees that were fully deductible on Schedule A. Her AGI is $100,000, which includes $19,700 of interest inc
Taylor Company had a net income of $50,000, paid income taxes of $20,000, and had before tax interest expense of $10,000. What was Taylor's times interest earned ratio? A. 5 B. 6 C. 7 D. 8 E. none of these
Taylor Company had net income of $50,000, paid income taxes of $20,000, and before tax interest expense of $10,000. What was Taylor's times interest earned ratio? a. 5 b. 6 c. 7 d. 8 e. none of these
Taylor Company had net income of $50,000, paid income taxes of $20,000, and had before tax interest expense of $10,000. What was Taylor's times interest earned ratio? A. 5 B. 6 C. 7 D. 8 E. None of these.
Lillian, a single taxpayer, had the following income and deductions for the tax year 2018. Compute Lillian's marginal, average and effective tax rates. | __Income__ | | Salary | $90,000 | Business Income | 24,000 | Interest income from taxable bonds
The interest coverage ratio equals income before income taxes plus interest expense divided by: a) income before income taxes. b) interest expense. c) income taxes. d) gross profit.
Little Books Inc. recently reported $3 million of net income. Its EBIT was $6 million, and its tax rate was 40 percent. What was its interest expense?
Computation of Taxable Income, Jim and Pat are married and file jointly. In 2016, Jim earned a salary of $46,000. Pat is self employed. Her gross income was $49,000 and her business expenses totaled $24,000. Each contributed $5,000 to a deductible IRA. Th
Lillian, a single taxpayer, had the following income and deductions for the tax year 2018. Compute Lillian's taxable income and federal tax liability for 2018. | __Income__ | | Salary | $90,000 | Business Income | 24,000 | Interest income from taxable
In a recent year Flounder Corp. had net income of $157,000, interest expense of $31,500, and income tax expense of $41,700. What was Flounder Corp.'s times interest earned for the year?
Crayton Corporation has a taxable income of $1,500,000 and a pretax accounting income of $1,350,000 in the current accounting period. What tax liability appears on the balance sheet for this year, assuming a 35% tax rate? A. $472,500 B. $525,000 C. $150,0
For an S-Corp filling out an 1120S, how do I find the amount of interest deductions entered on line 13?
In a recent year, Bramble Corp. had net income of $159,000, interest expense of $28,500, and income tax expense of $37,500. What was Bramble Corp.'s times interest earned for the year?
Cullumber Corp.'s 2018 income statement showed pretax accounting income of $2,600,000. To compute the federal income tax liability, the following 2018 data are provided: Income from exempt municipal bonds $101,000 Depreciation deducted for tax purposes i
Smoke and Mirrors currently has EBIT (Earnings Before Interest and Taxes) of $25,000 and is all-equity financed. EBIT is expected to stay at this level inventively. The firm pays corporate taxes equal to 35 percent of taxable income. The discount rate for
If a corporation pays interest payments to bondholders of $900,000 on its debt to them, and EBIT is $6,000,000, what is the taxable income?
Mickey and Jenny Porter file a joint tax return, and they itemize deductions. The Porters incur $3,650 in investment expenses. They also incur $5,750 of investment interest expense during the year. The Porters' income for the year consists of $183,000 in
Mark and Patricia report adjusted gross income of $380,500 and itemized deductions of $64,000 for the interest on their home acquisition mortgage (principal amount of $890,000), taxes, and charitable contributions. They file a joint income tax return and
Mary a single taxpayer with two dependent children has the following items of income and expense during 2015: Gross receipts from business: $144,000 Business Expenses: $180,000 Alimony Received: $22,000 Interest Income: $3,000 Itemized Deductions: $24
The accountant at Reber Company has determined that income before income taxes amounted to $6,750 using the FIFO costing assumption. If the income tax rate is 30% and the amount of income taxes paid would be $225 greater if the LIFO assumption were used,
Blackstone, Inc., has net income of $8,357, a tax rate of 38%, and interest expense of $723. What is the times interest earned ratio? Write your answer rounded off to two decimal points.
Corporate Taxes (LG3) Hunt Taxidermy, Inc., is concerned about the taxes paid by the company in 2012. In addition to $42.8 million of taxable income, the firm received $3,020,000 of interest on state-
The accountant at Concord Company has determined that income before income taxes amounted to $7,700 using the FIFO costing assumption. If the income tax rate is 20% and the amount of income taxes paid would be $300 greater if the LIFO assumption were used
Parkview West Inc. has gross income of $50,000, consisting of $37,000 of rent receipts and $13,000 of U.S. dividends. Rental deductions of $20,000 are claimed (interest, taxes, and cost recovery). $9,000 of dividends are paid to Susie and Sally, the only
Chuck, a single taxpayer, earns $82,000 in taxable income and $17,750 in interest from an investment in the City of Heflin bonds. (Use the U.S. tax rate schedule.) (Do not round intermediate calculations. Round your answers to 2 decimal places.) a. If Chu
Assume that a company has $132,961 of taxable income from %rations plus $8,855 of interest income and $21,804 of dividend income. What is the company's federal tax liability?
Sam, age 45, is single. For 2015, he has the following items: Business income $74,000 Business expenses $81,400 Alimony paid $11,100 Interest income $3,700 Itemized deductions $7,400 a. Determine Sam's taxable income for 2015. b. Determine Sam's NOL for
For its first year of operations, Tringali Corporation's reconciliation of pretax accounting income to taxable income is as follows: Tringali's tax rate is 36%. Assume that no estimated taxes have been paid. What should Tringali report as income tax paya
Lynn, age 45, is single and has no dependents. Her income and expenses for the current year are reported as follows: Income Salary $33,000 Taxable interest on corporation bonds 3,200 Business income 6
The Wendt Corporation had $10.5 of taxable income. A. What is the company's federal income tax bill for the year? b. Assume the firm receives an additional $1 million of interest income from some bonds it owns. What is the tax of this interest income?
Tamarisk Inc. reports the following pretax income (loss) for both book and tax purposes. Year Pretax Income (Loss) Tax rate 2015 123,000 40% 2016 98,000 40% 2017 (270,000) 45% 2018 110,000 45% The tax rates listed were all enacted by the beginning of 201
Henrich is a single taxpayer. In 2016, his taxable income is $425,000. What is his income tax and net investment income tax liability in each of the following alternative scenarios? a. All of his inc
Boilermaker Inc. reported taxable income of $870,000 this year and paid federal income taxes of $295,800. Not included in the company s computation of taxable income is tax-exempt income of $37,000, disallowed meals and entertainment expenses of $33,250,
In 2015, Simon, age 12, has interest income of $800 and dividend income of $4,000. He has no investment expenses. His parents have taxable income of $80,200 and file a joint tax return. Assume that no
Dunn Corporation's taxable income is less than $40,000. The corporation is not eligible for the AMT small corporation exemption. The CPA preparing the return does not calculate the AMT because he knows that taxable income is less than the AMT statutory ex
At the beginning of 2012, Annie, Inc. has a deferred tax asset of $7,500 and deferred tax liability of $10,500. In 2012, pretax financial income was $826,000 and the tax rate was 35%. Pretax income included: Interest income from municipal bonds $15,000 A
In a recent year, Bridgeport Corp. had net income of $153,000, interest expense of $29,500, and income tax expense of $39,900. What was Bridgeport Corp.'s times interest earned (rounded) for the year? a. 6.19 b. 6.54 c. 7.54 d. 5.19
At the beginning of 2012, Annie, Inc. has a deferred tax asset of $7,500 and deferred tax liability of $10,500. In 2012, pretax financial income was $826,000 and the tax rate was 35%. Pretax income included: Interest income from municipal bonds $15,000 Ac
In 2015, David, a single 18-year old taxpayer, received a salary of $3,600 and interest income of $1,800. He had $600 in itemized deductions. Calculate David's taxable income assuming he is (a) self-s
Phillis and Trey are married and file a joint tax return. For 2014, they have $27,000 of non-business capital gains, $10,800 of non-business capital losses, $2,700 of interest income, and no itemized deductions. The standard deduction for married filing j
Lois Ann owns 100% of New Inc, as corporation. Basis of her stock is 15,000 at January 1, 2011. New Inc reports the following: Taxable income 10,000 Interest income from tax exempt bonds 1,000 Nondeductible portion of meals and entertainment 4.000 Char
For the year 2015, McGuire's Auto had Operating Income of $320,000. It also had the following expenses: - Salaries and Wages Expense $75,000 - Building and Utilities Expense $86,000 - Interest Expense $122,000 - Income Tax Expense $84,000 - Cost of G
Calculate taxable income. Net income 100,000 Federal income taxes 22,250 Life insurance proceeds on key employee 60,000 Tax exempt interest 13,000 Net capital loss 2,500 Premium on life insurance 5,000
The Wendt Corporation reported $35 million of taxable income. Its federal tax rate was 21%. a. What is the company's federal income tax bill for the year? b. Assume the firm receives an additional $2 million of interest income from some bonds it owns. W
Chopra Corporation had net income of $100,000, paid income taxes of $30,000, and had interest expense of $8,000. What was Chopra's times interest earned ratio?
At present time, the U.S. federal income tax code allows corporations to deduct interest expense but not cash dividends paid to stockholders. Does the tax code tie in with any of the equity theories?
Determine the taxpayer's gross income for tax purposes in each of the following situations. If an amount is zero, enter "0". a.Deb, a cash basis taxpayer, traded a corporate bond with accrued interest
Determine taxable income in each of the following instances. Assume that the corporation is a C corporation and that book income is before any income tax expense. a. Book income of $50,000 including capital gains of $2,000, a charitable contribution of $
Manistee Corporation reported taxable income of $1,200,000 this year and paid federal income taxes of $408,000. Not included in the computation was disallowed entertainment expenses of $25,000, the tax-exempt interest of $20,000, and a net capital loss of
A man earned wages of $31,700, received $2,100 in interest from a savings account, and contributed $3,000 to a tax-differed retirement plan. He was entitled to a personal exemption of $3,400 and had deductions totaling $5,200. Find his gross income, adjus
TLR Productions reported Interest expense of $8,300, Income tax expense of $26,400, and Net income of $88,700. TLR's interest coverage ratio is (rounded to three decimals) A. 0.067. B. 0.072. C. 14.867. D. 13.867.
Ninette, age 16, has dividend income of $2,800 and interest income of $935. She has no investment expenses. Determine the net unearned income for the purpose of the kiddie tax. Ninette, age 16, has di
Scot and Vidia, married taxpayers, earn $15,000 in taxable income and $5,000 in interest from an investment in City of Tampa bonds. If Scot and Vidia earn an additional $5,000 of taxable income, what is their marginal tax rate on this income? Tax rate Mar
Scot and Vidia, married taxpayers, earn $246,000 in taxable income and $5,000 in interest from an investment in City of Tampa bonds. 1) If Scot and Vidia earn an additional $100,000 of taxable income, what is their marginal tax rate on this income? 2) H
Scot and Vidia, married taxpayers, earn $90,000 in taxable income and $5,000 in interest from an investment in the City of Tampa bonds. a. If Scot and Vidia earn an additional $78,750 of taxable income, what is their marginal tax rate on this income? b.
Madison Corporation reported taxable income of $400,000 in 20X3 and accrued federal income taxes of $136,000. Included in the computation of taxable income was regular depreciation of $200,000 (E&P depreciation is $60,000) and a net capital loss carryover
Haag Cop's 2011 income statement showed pretax accounting income of $750,000. To compute federal income tax liability, the following 2011 data are provided: Income from exempt municipal bonds $30,000 Depreciation deducted for tax purposes in excess of de
In 2017, AutoUSA Inc. received $4,600,000 of book income, including $20,000 of interest income from tax-exempt municipal bonds. AutoUSA reported $3,600,000 of regular business expenses. If it made $350,000 of estimated tax payments (prepayments) throughou
Henrich is a single taxpayer. In 2018, his taxable income is $450,000. What is his income tax and net investment Income tax liability in each of the following alternative scenarios? His $450,000 of taxable income includes $55,000 of long-term capital gai
In its first tax year, the Wittmann Estate generated $50,000 of taxable interest income and $20,000 of tax-exempt interest income. It paid fiduciary fees of $7,000. The estate is subject to a 45% marginal estate tax rate and a 40% marginal income tax rate
Compute gross income for a single (unmarried) taxpayer who has income that consists of: Gross salary $19,600 Interest on bank savings account 1,410 Interest on municipal bond 150 Interest on corporate bond 250 Ordinary dividend income from mutual fund 300
Allen Green is a single taxpayer with an AGI (and modified AGI) of $224,000, which includes $177,000 of salary, $29,200 of interest income, $11,400 of dividends, and $6,400 of long-term capital gains. What is Allen's net investment income tax liability th
HippCo Federal taxable income for the year is $1,000,000. Its operations are confined to Oregon and Montana. HippCo generates only business and interest income for the year. Federal cost recovery deductions totaled $200,000 Montana used this amount, but O
Shelly Inc. had a pretax financial income of $178,010 in 2014. Included in the computation of that amount is insurance expense of $ 3,850 which is not deductible for tax purposes. In addition, depreciation for tax purposes exceeds accounting depreciation
Calculate the net income includible in taxable income for the following hobby. Presume Val has AGI of $69,000 before considering anything from the hobby activity. Income 27,000 Mortgage interest and
Woolard Inc. has taxable income in 2016 of $150,000 before any depreciation deductions ( � 179, bonus, or MACRS) and acquired the following assets during the year: If Woolard elects $50,000 of � 179,
Kristal is single and claims one exemption. Last year she earned $37,800 in wages. Additional tax information for the year is as follows: Interest earned: $128; capital gains from sale of stock: $1,850; alimony paid: $6,400; contributions to IRA retiremen
Sage Company has the following two temporary differences between its income tax expense and income taxes payable. 2017 2018 2019 Pretax financial income $848,000 $882,000 $933,000 Excess depreciation expense on tax return (29,600) (39,400) (9,900) Excess
Scot and Vidia, married taxpayers, earn $62,500 in taxable income and $5,000 in interest from an investment in City of Tampa bonds. (Use the U.S. tax rate schedule. Do not round intermediate calculati
Blue's Corps 2015 income statement showed pretax accounting income of $1,500,000. To compute the federal income tax liability, the following 2015 data are provided: | Income from exempt municipal bonds | $50,000 | Depreciation deducted for tax purposes i
During the current year, Plankton, a single taxpayer, reports the following items income of income and expenses Income Salary 86,000 Tax Exempt interest 1,300 Bank account interest 2,300
Chuck, a single taxpayer, earns $57,500 in taxable income and $19,500 in interest from an investment in City of Heflin bonds. (Do not round intermediate calculations. Round your answers to 2 decimal p
The income and expenses of a corporation for federal income tax purposes are referred to as what type of income? A. nontaxable B. accounting C. tax
Walmart had income before interest expense and income taxes of $12,581 million and interest expense of $1,063 million. Sears had income before interest expense and income taxes of $3,596 million and interest expense of $1,143 million. Calculate the times
Bob files a single tax return and decides to itemize his deductions. Bob's income for the year consists of $75,000 of salary, $3,000 long-term capital gain, and $1,500 interest income. Bob's expenses for the year consist of $800 investment advice fees, $7
In its first tax year, the Vasquez Estate generated $50,000 of taxable interest income and $30,000 of tax-exempt interest income. It paid fiduciary fees of $8,000. The estate is subject to a 35% marginal estate tax rate and a 40% marginal income tax rate.
Vulera, Inc., has a semi-monthly payroll of $67,000 on September 15. The total payroll is taxable under FICA Taxes- HI; $63,850 is taxable under FICA Taxes-OASDI, and $10,300 is taxable under FUTA and SUTA. The state contribution rate for the company is 4
Income before taxes = $900,000 Income before taxes included the following: Interest income of $80,000 (from municipal bonds) Rental income was collected in advance in 2013 and earned in 2014 = $20,000 Depreciation per books = $40,000 and per income taxes
The income tax rate is 30% on current and is payable in the first quarter of 2014. The pretax income before the preceding adjusting entries is $6,800. Compute Income tax expense and Income tax payable.
Mickey and Jenny Porter file a joint tax return, and they itemize deductions. The Porters incur $3,500 in employment-related miscellaneous itemized deductions. They also incur $5,500 of investment interest expense during the year. The Porters' income for

Dews, Inc., an S corporation in Norfolk, Virginia, has revenues of $700,000, taxable interest of...

Question:

Tax:

Answer and Explanation:

Become a member and unlock all Study Answers

Ask a question

Search Answers

Learn more about this topic:

Related to this Question

Explore our homework questions and answers library