During a particular year, a corporation has $19.6 million in revenue, $2.1 milli

Question

During a particular year, a corporation has $19.6 million in revenue, $2.1 million of operating expenses, and depraciation expenses of $7 million. What is the approximate federal tax this corporation will have to pay for this tax year? Click the icon to view the federal corporate income tax rate structure in 2006 The approximate federal tax is $. (Round to the nearest dollar.) More Info ate Federal Income Tax Rates (2006 If Taxable Income Is: Over The Tax is: But Not Over of the Amount Over $50,000 75,000 100,000 335,000 10,000,000 15,000,000 18,333,333 S50,000 75,000 100,000 335,000 10,000,000 15,000,000 18,333,333 15% $7,500 + 25% 13,750 + 34% 22,250 + 39% 113,900 + 34% 3,400,000 + 35% 5.1 50,000 + 38% 35% S50,000 75,000 100,000 335,000 10,000,000 15,000,000 Print Done

Explanation / Answer

The Net income = Revenue - Operating expenses - Depreciation expenses

Net income = 19.6 million - 2.1 million - 7 million

Net income = 10.5 million

Using the federal corporate tax income structure as shown in the table

If taxable income is above 10 million and below 15 million, the tax is 3.4 million + 35% of taxable income over 10 million

Tax = 3400000 + .35*500000

Tax = 3575000

The approximate federal tax is $3575000.

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