Answered: The tax rates for a particular year are…

The tax rates for a particular year are shown below: Taxable Income Tax Rate $0 - 50,000 15% - 50,001 75,000 25% - 75,001 100,000 34% 100,001 - 335,000 39%

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.

Question

The tax rates for a particular year are shown below:
Taxable Income
Tax Rate
$0 - 50,000
15%
50,001
-
75,000
25%
75,001
-
100,000
34%
100,001
-
335,000
39%
What is the average tax rate for a firm with taxable income of $128,013?

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