P13-2 2. Corporate tax rates vary with the amount of taxable income. What curren
ID: 2703820 • Letter: P
Question
P13-2
2. Corporate tax rates vary with the amount of taxable income.
What currently is the range (lowest and highest) of corporate tax
rates in the United States?
P13-3
3. What is meant by the statement that depreciation provides a tax
shield? Explain how this works.
P13-4
4. Determine the marginal and average tax rates under the tax law
for corporations with the following amounts of taxable income:
a. $60,000
b. $150,000
c. $500,000
P14-1
1. The Robinson Company has the following current assets and
current liabilities for these two years:
2011 2012
Cash and marketable securities $50,000 $50,000
Accounts receivable 300,000 350,000
Inventories 350,000 500,000
Total current assets $700,000 $900,000
Accounts payable $200,000 $250,000
Bank loan 0 150,000
Accruals 150,000 200,000
Total current liabilities $350,000 $600,000
a. Compare the current ratios between the two years.
b. Compare the acid-test ratios between 2011 and 2012.
Comment on your findings.
P14-5
5. Following are selected financial data in thousands of dollars for
the Hunter Corporation.
2012 2011
Current assets $ 500 $400
Fixed assets, net 700 600
Total assets 1,200 1,000
Current liabilities 300 200
Long-term debt 200 200
Common equity 700 600
Total liabilities and equity $1,200 $1,000
Net sales $1,500 $1,200
Total expenses 1,390 1,100
Net income 110 100.
a. Calculate Hunter
Explanation / Answer
13-2
Americans are infatuated with the superlative. We are constitutionally drawn to the best, the biggest, the most. But few of us rejoiced at the news that as of April 1st, the United States had assumed the title of having the highest corporate tax rate in the world. The dubious feat was widely reported after Japan officially lowered its headline corporate tax rate Sunday from 39.5% to 38.01%
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