Shimmer Inc. is a calendar-year-end, accrual method corporation. This year, it sells the following long-term assets: Accumulated Asset Sales Price Cost Depreciation $670,000 $653,000 $31,000 Building Sparkle 229,000 281,000 n/a Corporation stock Shimmer does not sell any other assets during the year, and its taxable income before these transactions is $893,000. Taxable Income < $50,000 $50,000-$75,000 $75,000 $100,000 $100,000-$335,000 $335,000-$10,000,000 Corporate Income Tax Rates $10,000,000-$15,000,000 $15,000,000-$18,333,333 Over $18,333,333 Тах 15% of the taxable income $7,500 + 25% of taxable income over $50,000 $13,750 + 34% of taxable income over $75,000 $22,250+39% of taxable income over $100,000 $113,90034% of taxable income over $335,000 $3,400,000 + 35% of taxable income over $10,000,000 $5,150,000+ 38% of taxable income over $15,000,000 35% of the taxable income
Shimmer Inc. is a calendar-year-end, accrual method corporation. This year, it sells the following long-term assets: Accumulated Asset Sales Price Cost Depreciation $670,000 $653,000 $31,000 Building Sparkle 229,000 281,000 n/a Corporation stock Shimmer does not sell any other assets during the year, and its taxable income before these transactions is $893,000. Taxable Income < $50,000 $50,000-$75,000 $75,000 $100,000 $100,000-$335,000 $335,000-$10,000,000 Corporate Income Tax Rates $10,000,000-$15,000,000 $15,000,000-$18,333,333 Over $18,333,333 Тах 15% of the taxable income $7,500 + 25% of taxable income over $50,000 $13,750 + 34% of taxable income over $75,000 $22,250+39% of taxable income over $100,000 $113,90034% of taxable income over $335,000 $3,400,000 + 35% of taxable income over $10,000,000 $5,150,000+ 38% of taxable income over $15,000,000 35% of the taxable income
Chapter22: S Corporations
Section: Chapter Questions
Problem 23CE
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Question
What are Shimmer's taxable income and tax liability for the year? Use Corporate Tax Rate Table.
Transcribed Image Text:Shimmer Inc. is a calendar-year-end, accrual method corporation. This year, it sells
the following long-term assets:
Accumulated
Asset
Sales Price
Cost
Depreciation
$670,000 $653,000
$31,000
Building
Sparkle
229,000
281,000
n/a
Corporation stock
Shimmer does not sell any other assets during the year, and its taxable income
before these transactions is $893,000.
Transcribed Image Text:Taxable Income
< $50,000
$50,000-$75,000
$75,000 $100,000
$100,000-$335,000
$335,000-$10,000,000
Corporate Income Tax Rates
$10,000,000-$15,000,000
$15,000,000-$18,333,333
Over $18,333,333
Тах
15% of the taxable income
$7,500 + 25% of taxable income over $50,000
$13,750 + 34% of taxable income over $75,000
$22,250+39% of taxable income over $100,000
$113,90034% of taxable income over $335,000
$3,400,000 + 35% of taxable income over $10,000,000
$5,150,000+ 38% of taxable income over $15,000,000
35% of the taxable income
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