Question

(Corporate income tax) Sales for J.P. Hulett Inc. during the past year amounted to 54.2 million. Gross profits totaled $1.02 million, and operating and depreciation expenses were $500,000 and $358,000, respectively. Dividend income for the year was $13,000, which was paid by a firm in which Hulett owns 85 percent of the shares. Use 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 1 (Round to the nearest dollar.) Data Table Taxable income $0 - $50,000 $50,001 - $75,000 $75,001 - $100,000 $100,001 - $335,000 $335,001 - $10,000,000 $10,000,001 - $15,000,000 $15,000,001 - $18,333,333 Over $18,333,333 Marginal Tax Rate 15% 25% 34% 39% 34% 35% 38% 35% Print Done

Answer 1

Isales Particulous less: Cost of goods sold (sales- come true Amount Amount 4,200,000 (3120,000) 1,020,000 Gross Profit Operating Expense Depreciation Expense 500000 358000 858,000 162000 operating profit 13000 Dividend Income Dividend Received deduction Good €13000) Taxable income -> 162000 Dtax liability: Tax -50000 x is b +[75000-50000) *25)]+[100000 - 75000)x34;1 + [162000 - 100000) *3911:] = 7500 + 6250 + 8500 + 221,180 46, 430 2) Firm's Average Tax Rate : - Tax liability 100= 4161630 16200 * too 28.60+%. Taxable income 3). Marginal Tax Rate = 391/