Hunt Taxidermy, Inc. is concerned about the taxes paid by the company in 2013. In addition to $36.5 million of taxable income, the firm received $1,250,000 of interest on state-issued bonds and $400,000 of dividends on common stock it owns in Hunt Taxidermy, Inc. Calculate Hunt Taxidermy's taxable income.

Question

Quizplus · Accepted Answer

Taxable income is calculated as total income minus deductions. In this case, the only additional income to consider is the interest and dividends received. However, these amounts are not deductible. Therefore, taxable income is:
$36.5 million + $1.25 million + $400,000 = $36,620,000. 
Therefore, the correct answer is (D).