An accountant for a corporation forgot to pay the​ firm's income tax of ​$725,769.12 on time. The government charged a penalty of 9.5​% interest for the 37 days the money was late. Find the total amount​ (tax and​ penalty) that was paid. Assume 365 days in a year.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

An accountant for a corporation forgot to pay the​ firm's income tax of

​$725,769.12

on time. The government charged a penalty of

9.5​%

interest for the

37

days the money was late. Find the total amount​ (tax and​ penalty) that was paid. Assume 365 days in a year.

Expert Solution
Step 1

Income Tax :— It is tax levied by goverment directly on their citizens. 

 

Penalty on income tax :— It is a fine charged for the under reporting of income or late filing of return on the income tax.

 

Penalty is calculated on income tax not on income. 

And it is charged only for the late days.

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Administration and Procedures
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education