find 1-the firm\'s tax liablity for the year 2-The firm\'s average tax rate is (
ID: 2330537 • Letter: F
Question
find 1-the firm's tax liablity for the year
2-The firm's average tax rate is
(Corporate income tax) Last year Sanderson, Inc. had sales of $3.4 million. The firm's cost of goods sold came to $2.1 million, its operating expenses excluding depreciation of S95,000 were S396,000, and the firm paid $145,000 in interest on its bank loans. Also, the corporation received $45,000 in dividend income (from a company in which it owned less than 20 percent of its shares) but paid $25,000 in the form of dividends to its own common stockholders. Use the corporate tax rates shown in the popup window,EEto calculate the corporation's tax liability. What are the fim's average and marginal tax rates? The firm's tax liability for the year is $D (Round to the nearest dollar.)Explanation / Answer
Sales $ 3400000
Cost of Goods sold $ 2100000
Depreciation $95000
Operating Exp $396000
Operating Profit $809000
Interest Expense $145000
Taxable Dividend Income
$45000*30% $13500
taxable Income $650500
a tax Liability
$50000*15% $7500
$25000*25% $6250
$25000*34% $8500
$235000*39% $91650
($650500-$335000)*34% $107270
Firm Total tax Liability $221170
b.Firms average tax rate =Total tax /Taxable incom
=$221170/$650500
=34%
c.Marginal tax Rate is the tax rate applicable for the next $ of taxable income
which is 34% .It is tax slab of $335001 to $10000000
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