This year, Mesa Inc.’s before-tax income was $10,814,500. It paid $494,000 income tax to Minnesota and...

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This year, Mesa Inc.’s before-tax income was $10,814,500. It paid $494,000 income tax to Minnesota and...

This year, Mesa Inc.’s before-tax income was $10,814,500. It paid $494,000 income tax to Minnesota and $430,000 income tax to Illinois.

Compute Mesa’s federal income tax.
What is Mesa’s combined tax rate on its income?

business accounting

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Answer 1

Answer #1

Before-tax income	$ 10,814,500.00
Less: Deduction for state income tax(494000+430000)	$ 924,000.00
Taxable Income	$ 9,890,500.00
Tax rate	21%
Federal income tax	$ 2,077,005.00

Mesa’s combined tax rate = ([$924,000 state tax + $2,077,005 federal tax] ÷ $10814500)	27.75%

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Answer 2

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