What are the average and marginal tax rates for a corporation that has $97,648 o

Question

What are the average and marginal tax rates for a corporation that has $97,648 of taxable income? The tax rates are as follows:

Corporate Taxable Income ($)    Tax Rate (%)

          0-50,000                                 15
50,001-75,000                                25
75,001-100,000                              34

a. 21.97%; 25%

b. 21.97%; 34%

c. 23.08%; 34%

d. 34%; 34%

Which of the following items is NOT normally considered to be a current asset?

Inventory.

Bonds.

Cash.

Short-term, highly-liquid, marketable securities.

Accounts receivable.

a. 21.97%; 25%

b. 21.97%; 34%

c. 23.08%; 34%

d. 34%; 34%

Which of the following items is NOT normally considered to be a current asset?

a.

Inventory.

b.

Bonds.

c.

Cash.

d.

Short-term, highly-liquid, marketable securities.

e.

Accounts receivable.

Explanation / Answer

2. Bonds. all except bonds are assets. bond is liability as the company raised fund through the issue of bond. bond can be treated as current liability if it is repayable within 1 year and Non-current liability if not repayable within 1 year. all the above assets are current because they are realisable within 1 year

1. b. 21.97%; 34% 50000 15%     7,500.00 25000 25%     6,250.00 22648 34%     7,700.32 21,450.32 Average rate = 21,450.32/97,648 21.97% Marginal rate = 34.00% (Since the company is having taxable income over 75,000 any additional increase in income will be taxed at 34%

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