Mrs. Ford, who has a 39.6% marginal tax rate, is the sole shareholder and CEO of Fast Inc. She also holds a $1 million interest-bearing note issued by Fast. The corporation's current-year financial records show the following: $$\begin{array} { l r }
\text { Sales revenue } & \$ 1,879,000 \
\text { Mrs. Ford's salary } & ( 160,000 ) \
\text { Other operating expenses } & ( 414,000 ) \
\text { Interest paid on Mrs. Ford's note } & ( 60,000 ) \
\text { Dividend distributed to Mrs. Ford } & ( 100,000 )
\end{array}$$ Compute Fast's taxable income.

Question

Mrs. Ford, who has a 39.6% marginal tax rate, is the sole shareholder and CEO of Fast Inc. She also holds a $1 million interest-bearing note issued by Fast. The corporation's current-year financial records show the following: $$\begin{array} { l r } 
\text { Sales revenue } & \$ 1,879,000 \
\text { Mrs. Ford's salary } & ( 160,000 ) \
\text { Other operating expenses } & ( 414,000 ) \
\text { Interest paid on Mrs. Ford's note } & ( 60,000 ) \
\text { Dividend distributed to Mrs. Ford } & ( 100,000 )
\end{array}$$ Compute Fast's taxable income.

Quizplus · Accepted Answer

The Answer of Mrs. Ford, who has a 39.6% marginal tax rate, is the sole shareholder and CEO of Fast Inc. She also holds a $1 million interest-bearing note issued by Fast. The corporation's current-year financial records show the following: $$\begin{array} { l r } 
\text { Sales revenue } & \$ 1,879,000 \
\text { Mrs. Ford's salary } & ( 160,000 ) \
\text { Other operating expenses } & ( 414,000 ) \
\text { Interest paid on Mrs. Ford's note } & ( 60,000 ) \
\text { Dividend distributed to Mrs. Ford } & ( 100,000 )
\end{array}$$ Compute Fast's taxable income.

Mrs Ford, Who Has a 39 Compute Fast's Taxable Income