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Use the Corporate Income Tax information above to answer this question. A corporation has a taxable income of $2,959,971. At this income level, the federal income rate is 50%, the state tax rate is 19%, and the local tax rate is 10%. If each tax rate is applied to the the total taxable income, the company

Use the Corporate Income Tax information above to answer this question. A corporation has a taxable income of $2,959,971. At this income level, the federal income rate is 50%, the state tax rate is 19%, and the local tax rate is 10%. If each tax rate is applied to the the total taxable income, the company

FINANCIAL ACCOUNTING
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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Use the Corporate Income Tax information above to answer this question. A corporation has a taxable income of $2,959,971. At this income level, the federal income rate is 50%, the state tax rate is 19%, and the local tax rate is 10%. If each tax rate is applied to the the total taxable income, the company would have to pay $2,959,971 * 0.50 in federal taxes. Luckily for the corporation, the taxes paid are deducted as described above. How much is paid in federal taxes if the customary deductions are taken into consideration? Round to the nearest dollar.
Transcribed Image Text:Use the Corporate Income Tax information above to answer this question. A corporation has a taxable income of $2,959,971. At this income level, the federal income rate is 50%, the state tax rate is 19%, and the local tax rate is 10%. If each tax rate is applied to the the total taxable income, the company would have to pay $2,959,971 * 0.50 in federal taxes. Luckily for the corporation, the taxes paid are deducted as described above. How much is paid in federal taxes if the customary deductions are taken into consideration? Round to the nearest dollar.
Corporate Income Tax A corporation's taxable income is taxed at the federal, state, and local levels. It is customary for an agency to deduct the taxes paid to the other agencies before computing the company's tax liability. For example, the federal taxes are based on the income that remains after the state and local taxes are deducted. Similarly, the state taxes are based on the income that remains after federal and local taxes are deducted; the local taxes are based on the income that remains after state and federal taxes are deducted.
Transcribed Image Text:Corporate Income Tax A corporation's taxable income is taxed at the federal, state, and local levels. It is customary for an agency to deduct the taxes paid to the other agencies before computing the company's tax liability. For example, the federal taxes are based on the income that remains after the state and local taxes are deducted. Similarly, the state taxes are based on the income that remains after federal and local taxes are deducted; the local taxes are based on the income that remains after state and federal taxes are deducted.
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