Using 2017’s tax rules, Amiouny, Inc. had sales revenue of $400,000. Costs other than depreciation and interest expense were 30 percent of sales. Depreciation expense was $12,000, interest expense was $23,000, dividends received were $10,000 and dividends
Using 2017’s tax rules, Amiouny, Inc. had sales revenue of $400,000. Costs other than depreciation and interest expense were 30 percent of sales. Depreciation expense was $12,000, interest expense was $23,000, dividends received were $10,000 and dividends
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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Using 2017’s tax rules, Amiouny, Inc. had sales revenue of $400,000. Costs other than
depreciation and interest expense were 30 percent of sales. Depreciation expense was $12,000, interest expense was $23,000, dividends received were $10,000 and dividends paid were $5,000. Which of the following statements is most FALSE? (Use the corporate tax table.)-
The firm's taxable income was $248,000.
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The firm's average tax rate was 32.25 percent.
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The firm's marginal tax rate was 39 percent.
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The firm's tax for the year was $79,970.
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The after-tax income was $168,030.
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