Question

Gopher Corporation reported taxable income of $560,000 this year. Gopher paid a dividend of $84,000 to its sole shareholder, Sven Anderson. The dividend meets the requirements to be a qualified dividend, and Sven is subject to a tax rate of 15 percent on the dividend. What is the income tax imposed on the corporate income earned by Gopher and the income tax on the dividend distributed to Sven

Answer 1

$203,00

Step-by-step explanation:

Gopher Corporation

Corporate Income tax will be: Taxable income × Tax rate

$560,000 ×34%= $190,400

Income tax on dividend will be :

Shareholder Dividend ×tax rate

$84,000 ×15%=$ 12,600

Income tax total=

$190,400+$12,600

=$203,000