FIN-650 Module 2 DQ 2 – Problem 2-7 – Corporate Tax Liability – The Talley Corporation

FIN-650 Module 2 DQ 2 – Problem 2-7 – Corporate Tax Liability – The Talley Corporation

Managerial Finance – Understanding Financial Statements

Grand Canyon University

This discussion thread will be used to discuss the practice problems completed in this module. After completing the problems, submit your answers to the instructor. Your instructor will specify which problems will be reviewed for discussion. Post your answers to the posted problem to this discussion thread and discuss any challenges you had with completing the problems, tips that helped you arrive at the correct answers, and/or questions you may still have.

Problem 2-7

The Talley Corporation had a taxable income of $365,000 from operations after all operating costs, but before (1) interest charges of $50,000 (2) dividends received of $15,000 (3) dividends paid of $25,000, and (4) income taxes. What are the firm’s income tax liability and its after-tax income? What are the company’s marginal and average tax rates on taxable income?