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15 March, 07:46

Assume that Clampett, Inc., has $390,000 of sales, $340,000 of cost of goods sold, $250,000 of interest income, and $230,000 of dividends. What is Clampett, Inc.'s excess net passive income

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  1. 15 March, 08:26
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    Clampett, Inc.'s excess net passive income is $262,500.

    Explanation:

    First we need to calculate the Gross Receipt

    Gross Receipt

    Sales $390,000

    Interest Income $250,000

    Dividend $230,000

    Gross receipts $870,000

    25% of Gross receipt = $870,000 x 25% = $217,500

    Now Calculate the passive income

    Interest Income $250,000

    Dividend $230,000

    Passive Income $480,000

    Now calculate the excess passive income

    Excess passive income = Passive income - 25% of gross receipt

    Excess passive income = $480,000 - $217,500 = $262,500
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