Question

The Intra Corporation earned $3 million plus received $200,000 in preferred dividends. The Corporation is in the 30% tax bracket. Taxes on its entire amount of taxable income would be:(A) $900,000(B) $918,000(C) $930,000(D) $960,000

Answer 1

tax liability amount is $918000

so option B is correct

Step-by-step explanation:

given data

earn = $3000000

dividends = $200000

tax rate = 30%

to find out

tax liability amount

solution

we have $200000 dividend income

so taxable dividend income is 30%

so taxable dividend income = 0.30 × 200000

taxable dividend income = $60000

so total taxable income is = $3000000 + $60000

total taxable income = $3060000

and

tax liability is 30% of $3060000

tax liability amount = 0.30× 3060000

tax liability amount is $918000

so option B is correct