Dexter Corporation Reports the Following Results for the Current Year

question 44

Essay

Dexter Corporation reports the following results for the current year: $\begin{array}{lr}\text { Gross income from operations } & \$ 90,000 \\\text { Dividends from less than } 20 \% \text { - owned corporations } & 50,000 \\\text { Operating expenses } & 75,000 \\\text { Charitable contributions } & 10,000\end{array}$ In addition, Dexter has a $25,000 NOL carryover from the preceding tax year. What is Dexter's taxable income fo current year?

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Definitions:

Financial Risk

The possibility of losing money on an investment or business venture, often associated with the potential for financial loss due to market volatility, credit risk, and liquidity risk.

Debt Ratio

A financial ratio that measures the extent of a company's leverage, calculated as total debt divided by total assets.

Interest Expense

The cost incurred by an entity for borrowed funds, which can include payment of interest on bonds, loans, convertible debt, and lines of credit.

Capital Structure

The mix of various forms of external funds and equity that a firm uses to finance its activities.