Question Help (Corporate income tax) Sales for J. P. Hulett Inc. during the past

Question

Question Help (Corporate income tax) Sales for J. P. Hulett Inc. during the past year amounted to $4.4 million. Gross profits totaled $1.05 million, and operating and depreciation expenses were $502,000 and $352,000, respectively. Dividend income for the year was $11,000, which was paid by a firm in which Hulett owns 85 percent of the shares. se the corporate tax rates shown in the popup window. , to Comcute the corporation's tax liability. What are the firm's average and marginal tax rates? The firm's tax liability for the year is s(Round to the nearest dollar.) The firm's average tax rate is ]% (Round to two decimal places.) The firm, marginal tax rate is[]% (Round to the nearest integer) ro

Explanation / Answer

Calculations and explanations: sale - gross profit = cost of goods sold. Thus costs of goods sold = 4,400,000 - 1,050,000 = $3,350,000

Computation of tax liability:

Thus tax liability = $60,334 (rounded off to the nearest dollar)

Average tax rate = tax liability/taxable amount = 60,334/197,650 = 30.53%

Marginal tax rate = tax on any additional dollar = 39%

Sale 4,400,000.00 Cost of goods sold (3,350,000.00) Gross profit 1,050,000.00 Operating expenses (502,000.00) Depreciation expenses (352,000.00) Operating profit 196,000.00 Dividend income 1,650.00 Taxable income 197,650.00

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

---

---

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