Assume that Clampett, Incorporated, has $240,000 of sales, $190,000 of cost of goods sold, $100,000 of interest income, and $80,000 of dividends. What is Clampett, Incorporated's excess net passive income?

Question

Quizplus · Accepted Answer

Excess net passive income is calculated as net passive income minus $25,000. Net passive income is calculated as passive income minus expenses. Passive income includes interest income and dividends. Expenses include cost of goods sold. Therefore, Clampett, Incorporated's excess net passive income is $100,000 (interest income) + $80,000 (dividends) - $190,000 (cost of goods sold) - $25,000 = $75,000.

Assume That Clampett, Incorporated, Has $240,000 of Sales, $190,000 of Cost