In this problem , what figures do I use to calculate dividends received?The Talley Corporation had

a taxable income of $365,000 from operations after all operating costs but before (1) interest charges of $50,000, (2) dividends received of $15,000, (3) dividends paid of $25,000, and (4) income taxes. What are the firm’s income tax liability and its after-tax income? What are the company’s marginal and average tax rates on taxable income?

Solution:

                                   Income                                                                       $365,000 

Less Interest deduction                                        (50,000)

Plus: Dividends received                                          4,500 

                                           Taxable income                                             

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