The taxable income for Company X is $65,000.00
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
The taxable income for Company X is $65,000.00.
The Corporate Tax Rate Table is listed below.
RATES INCOME LEVELS
15% 0-50,000
25% 50,001 – 75,000
34% 75,001 – 100,000
What is company X's average tax rate?
Expert Solution
Step 1: Meaning of Average Tax
The average tax rate is the tax rate an individual pays when he or she adds all sources of income that are taxable and divides it by the amount of tax the individual actually owes..
The formula for this Average Tax Rate = Total Taxes / Total Taxable Income
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