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IMTU Corporation (it stand for " Made This Up") had sales last year of $1,000,000. They sell heat shields to place on your lap for stupid McD's customers who insist on placing a cup of hot coffee between their legs. The materials cost $90,000 (that's good) but the labor to put them together costs $720,000 (yes they are union and yes the company is looking to move this operation "off-shore" next year but that's beyond the scope of this course). Advertising was just $30,000, as they mostly use word-of-mouth. They did need to raise some money this year. The bank loaned them $150,000 at 8% (that interest is due this year). The interest didn't worry them too much as it was partly off-set by the dividend check they received from McDonalds for $8,000 (hmmmmm - I wonder if there is a conflict of interest here?) Anyway, all things considered, "it was a very good year" so much so they paid their loyal shareholders $50,000 in common stock dividends. OK, given all that, what was their Federal tax bill?

Reference no: EM131160926

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