A company wants to set up operations in a country with the following corporate t

Question

A company wants to set up operations in a country with the following corporate tax rate structure:Taxable Income Tax Rate <$50,000 15% $50,000 - $75,000 25% $75,000 - $100,000 34% >$100,000 39% Therefore, a taxable income of $60,000 would result in taxes due of $50,000*0.15 + ($60,000-$50,000)*0.25 = $50,000*0.15 + $10,000*0.25 = $10,000 If the compay expects gross revenues of $400,000, $300,000 in total costs, $40,000 in allowable tax deductions and $4,000 in a one-time business start-up credit, how much should the company expect to pay in taxes? Answer $5,285 $6,000 $10,000 $60,000

Explanation / Answer

Hi,

Please find the answer as follow:

Net Taxable Income = 400000 - 300000 - 40000 = 60000

Tax Amount = 50000*.15 + 10000*.25 = 10000

Answer is 10000

Thanks.

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.