Griffey Communications Recently Realized $122,500 in Operating Income ?
Assume a 70% Dividend Exclusion for Tax on Dividends

question 20

Multiple Choice

Griffey Communications recently realized $122,500 in operating income.The company had interest income of $25,000 and realized $70,000 in dividend income.The company's interest expense was $40,000.Using the corporate tax schedule below,what is Griffey's tax liability? $$\begin{array} { l r r } \text { Taxable Income } & \text { Tax on Base of Bracket } & \text { Percentage on Excess above Base } \\\text { Up to } \$ 50,000 & \$ 0 & 15 \% \\\$ 50,000 - \$ 75,000 & 7,500 & 25 \\\$ 75,000 - \$ 100,000 & 13,750 & 34 \\\$ 100,000 - \$ 335,000 & 22,250 & 39 \\\$ 335,000 - \$ 10,000,000 & 113,900 & 34 \\\$ 10,000,000 - \$ 15,000,000 & 3,400,000 & 35 \\\$ 15,000,000 - \$ 18,333,333 & 5,150,000 & 38 \\\text { Over } \$ 18,333,333 & 6,416,667 & 35\end{array}$$
?
Assume a 70% dividend exclusion for tax on dividends.

• A) $37,702
• B) $27,359
• C) $33,365
• D) $32,364
• E) $36,702

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