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Corporate income tax) The Robbins Corporation is an ol wholes
Corporate income tax) The Robbins Corporation is an ol wholes. The firm's les last year were $1.07 milion, with the cost of goods sold oval to 5630,000. The firm paid $238.000 and its cash operating expenses were $10.000. Also, the firm received 544,000 individend income from a fim in which the firm owned 22% of the shares will paying only $11.000 individends to its stockholders Depreciation expense was $40.000. Use the corporale bax rates shown in the popup window. Ito compute the tem's taty. What we the few's average and marginal tres? The Robbins Corporation's taxability for the yow is Round to the nearest door) The's vergetures and is two decimal places) The's marginal tax rate is Rond to the nearest)
nich the firm owned the firm's average and marginal tax rates? arest dollar.) 0 Data Table m Taxable income Marginal Tax Rate $0 - $50,000 15% $50,001 - $75,000 25% $75,001 - $100,000 34% $100,001 - $335,000 39% $335,001 - $10,000,000 34% $10,000,001 - $15,000,000 35% $15,000,001 - $18,333,333 38% Over $18,333,333 35%
Expert Solution
Robbins corporation. step1) construction of income statement i)sales 1070000 ii)less cost of goods sold $630000 iii)gross profit $440000 iv)less operating expenses. a) depreciation $49000. b)cash operating expenses $102000. total operating expenses $151000 v) operating income [iii-iv] $289000 vi)other income and expenses a) dividend income (22%*44000) $9680 b)interest paid -$238000 total other income $228320 vii) taxable income $60680 therefore Robbins corporation tax liability for the year is on first $ 50000* 15%=$7500 on balance $10680*25%=2670 total tax liability is $ 10170. Step2) calculation of average tax rate average tax rate =(tax liability/taxable income)*100 = (10170/60680)*100 =16.76% . Step3) Robbins corporation marginal tax rate is 25% because it's total taxable income does not exceed $75000 so it falls under second slab of $50000-$75000 against which the marginal slab rate is 25% thereby the firm's marginal tax rate is 25% respectively.
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