During the 2013 financial year, World Wide contractors Corporation reported a gross profit of $520,000 and opearting expense of $235,000. The corporation received income from interest on bonds amounting to $15,000. It also has a 15% common stock holding in Multiple War Corporation, and received $25,000 in income from dividends. Assume a tax rate of 40%, and assume that the 70% dividend exclusion applies.
A. Calculate the tax liabilities on interest received, and the dividends received.
B. Calculate the earning available to common stockholders
C. If World Wide Contractors Corporation increases its common stock holding in Multiple Wire Corporation to 25%, what is the tax implication for World Wide Contractors Corporation?
D. Compare, contrast, and discuss the after tax amounts resulting from the interest income and dividend income calculated in parts B and C.
E. What is World Wide Contractors Corporation's total tax liability for the year?