1. Fly Green Airlines has the following record of earnings for the years 2006 through 2013. a. Indicate the carryback/carry forward amounts. b. Calculate the tax refund in 2011 if their tax rate during this time period has been 40%. c. Indicate the carry forward, the taxable earnings, and tax liability for 2012 and 2013. Year Taxable earnings 2006 $ 400,000 2007 500,000 2008 600,000 2009 400,000 2010 300,000 2011 1,500,000 2012 500,000 2. DirectJet has $500,000 of earnings before interest and taxes at the year end. Interest expenses for the year were $10,000. The airline expects to distribute $100,000 in dividends. Calculate the earnings after taxes for the airline assuming a 40 percent tax on ordinary income. 3. The BAA airport had a retained earnings balance of $850,000 at the beginning of 2012. By the end of 2012, the airport’s retained earnings balance was $950,000. During 2012, the airport earned $245,000 as net profits after paying its taxes. The airport was then able to pay its preferred stockholders $45,000. Compute the common stock dividend per share in 2012 assuming 10,000 shares of common stock outstanding.
