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Homework answers / question archive / Corporate income? tax)  The Robbins Corporation is an oil wholesaler

Corporate income? tax)  The Robbins Corporation is an oil wholesaler

Finance

Corporate income? tax)  The Robbins Corporation is an oil wholesaler. The? firm's sales last year were $1.06 ?million, with the cost of goods sold equal to $650,000. The firm paid interest of $203,500 and its cash operating expenses were $102,000. ? Also, the firm received $42,000 in dividend income from a firm in which the firm owned 22% of the? shares, while paying only $10,000 in dividends to its stockholders. Depreciation expense was $48,000. Use the corporate tax rates shown in the popup? window, LOADING...

?, to compute the? firm's tax liability. What are the? firm's average and marginal tax? rates?

The Robbins? Corporation's tax liability for the year is ?$

11750.00

 

The? firm's average tax rate is

17.54%

 

**what is the firm's marginal tax rate??**

The? firm's marginal tax rate is

___?%. ?(Round to the nearest? integer.)

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The Robbins Corporation tax liability for the year is $67,000.  
   
Sales $1,060,000.00 
COGS -650000
Gross Profit $410,000.00  
Interest -203500
Cash operating expenses -102000
Dividend received ($42,000*25%) 10500
Depreciation -48000
Net Profit $67,000.00 

 

The marginal rate of tax is 25% which is the highest of the slab rates under which the taxable income of the firm falls.

The firm's marginal tax rate is 25%

Taxable Income

Tax slab

Marginal Tax Rate

$ 59,500.00

$50,001 - $75,000

25%