Question: Can you explain the correct methodology to solve this general accounting problem? Meridian Corporation has the following cash flows: Operating income: $320,000 Interest received: $15,000

Can you explain the correct methodology to solve this general accounting problem?

Meridian Corporation has the following cash flows: Operating income: $320,000 Interest received: $15,000 Interest paid: $55,000 Dividends received: $25,000 Dividends paid: $70,000 If the applicable income tax rate is 35% (federal and state combined), and if 65% of dividends received are exempt from taxes, what is the corporation's tax liability? a. $98.000 b. $93,625 c. $101,062.50 d. $89,250

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