Specialty Corp is a cash basis
Chapter11: The Corporate Income Tax
Section: Chapter Questions
Problem 11MCQ
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Question
Specialty Corp is a cash basis calendar-year taxpayer. The corporation has a 25 percent marginal tax bracket this year. It will receive an additional $5,000 this year if it bills its customers at the beginning of December. But if it bills its customers at the end of December, it will not receive the $5,000 until January of next year.
If Specialty Corp’s marginal tax rate next year is estimated to be 15 percent, when would the company most likely bill its customers?
If Specialty Corp’s marginal tax rate next year is estimated to be 15 percent, when would the company most likely bill its customers?
Specialty Corp. would bill its customers at the beginning of December.
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Specialty Corp would bill its customers in the middle of December
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Specialty Corp would bill its customers at the end of December.
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It will not matter when the company bills its customers for tax purposes
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