Ag Silver Mining, Inc. has $500,000 of earnings before interest and taxes at the year end. Interest expenses for the year were $10,000. The firm expects to distribute $100,000 in dividends. Calculate the earnings after taxes for the firm assuming a 40 percent tax on ordinary income. (Please calculate the arithmetic solution and show your work)

To calculate the earnings after taxes for Ag Silver Mining, Inc., we need to subtract the taxes from the earnings before interest and taxes (EBIT).

1. Calculate the taxable income:
Taxable income = EBIT - Interest expense
Taxable income = $500,000 - $10,000
Taxable income = $490,000

2. Calculate the taxes on ordinary income:
Taxes on ordinary income = Taxable income * tax rate
Taxes on ordinary income = $490,000 * 40%
Taxes on ordinary income = $196,000

3. Calculate the earnings after taxes:
Earnings after taxes = EBIT - Taxes on ordinary income - Dividends
Earnings after taxes = $500,000 - $196,000 - $100,000
Earnings after taxes = $204,000

Therefore, the earnings after taxes for Ag Silver Mining, Inc. is $204,000.