In 2019, Coral Corporation (a C corporation) sold $100,000 of merchandise for which it paid $40,000.It also paid $35,000 of other expenses.All transactions were in cash.What is Coral Corporation's after-tax net cash inflow?

Question

Quizplus · Accepted Answer

Coral Corporation's after-tax net cash inflow can be calculated by first determining its taxable income, which is the sales revenue minus the cost of goods sold and other expenses. This gives us a taxable income of $25,000 ($100,000 - $40,000 - $35,000). Assuming a corporate tax rate of 21%, the tax owed would be $5,250 ($25,000 * 21%). Therefore, the after-tax net cash inflow is $19,750 ($25,000 - $5,250).

In 2019, Coral Corporation (A C Corporation) Sold $100,000 of Merchandise