(Computing income taxes) Sandersen Inc. sells minicomputers. During the past yea
ID: 1174550 • Letter: #
Question
(Computing income taxes) Sandersen Inc. sells minicomputers. During the past year, the company's sales were $3.00 million. The cost of its merchandise sold came to $2.00 million, and cash operating expenses were $400,000; depreciation expense was $100,000, and the firm paid $150,000 in interest on its bank loans. Also, the corporation paid $25,000 in the form of dividends to its own common stockholders. Calculate the corporation's tax liability by using the corporate tax rate structure in the popup window, EE The corporation's tax liability is $. (Round to the nearest dollar.) Data Table Corporate Tax Rates 15% 25% 34% 35% Additional surtax: -5% on income between $100,000 and $335,000 ·3% on income between $15,000,000 and $18,333,333 $0-$50,000 $50,001-$75,000 $75,001-$10,000,000 over $10,000,000 (Click on the icon located on the top-right corner of the data table above in order to copy its contents into a spreadsheet.) Print Done Enter vour answer in the answer boxExplanation / Answer
Sales = $ 3,000,000
Cost of goods sold= ($ 2,000,000)
Gross profits= $1,000,000
Less-Operating expenses:
Cash operating expenses=$ 100,000
Depreciation expense=$ 400,000
Operating income = $ 500,000
Other taxable income and expenses:
Interest expense =($ 150,000)
Taxable income$ 350,000
Tax computation
0- 50,000 = 15% * 50000 = 7500
50000 - 75000 = 25% * 25000 = 6250
75000 - 350000 = 34% * 275000 = 93500
Total = $107250
Add 5% surtax for incomeBetween $ 100,000 and $335,000 = 11750
Tax Liability = 107250 + 11750
= 119000
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