Homework: Chapter 3 Homework Save Score: 0 of 1 pt 45 of 6 (5 complete)> HW Scor

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Homework: Chapter 3 Homework Save Score: 0 of 1 pt 45 of 6 (5 complete)> HW Score: 66.67%, 4 of 6 pts P3-10 (similar to) Question Help (Corporate income tax) Boisjoly Productions had taxable income of $19.9 million. a. Calculate Boisjoly's federal income taxes using the tax table shown in the popup window: EEB b. Now calculate Boisjoly's average and marginal tax rates a. The firm's tax liability for the year is Round to the nearest dollar.) Data Table Marginal Tax Rate Taxable Income $0 $50,000 50,001 S75,000 75,001-$100,000 $100,001-$335,000 $335,001-$10,000,000 15% 25% 34% 39% 34% $10,000,001-315.000.000 | 35% $15,000,001-$18333333| 3896 35% Over $18,333,333 Enter your answer in the answer box and then click Check Answer Print Done Check Answer remaining

Explanation / Answer

a.

tax liability

=50000*15%+(75000-50000)*25%+(100000-75000)*34%+(335000-100000)*39%+(10000000-335000)*34%+(15000000-10000000)*35%+(18333333-15000000)*38%+(19900000-18333333)*35%

=6965000

b.

avearge tax rate=6965000/(19.9*1000000)=35.0%

marginal tax rate=35%, because this is the rate applicable on the last dollar of income

the above is answer..

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