FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Need help to learn how to calculate the tax​ liability, after-tax​ earnings, and average tax rates for the following levels of corporate earnings before​ taxes:
$7,700​; $81,100​; $304,000​; $499,000​;$1.9 ​million; $9.8 million; and $19.8 million.
b. Plot the average tax rates​ (measured on the y​ axis) against the pretax income levels​ (measured on the x​ axis). What generalization can be made concerning the relationship between these​ variables?
 
Attached is the chart 
Corporate Tax Rate Schedule
Tax calculation
Range of taxable income
$0 to
(Marginal rate x amount over base bracket)
$0)
50,000)
Base tax
+
$50,000
$0
x amount over
(15%
(25%
(34%
(39%
(34%
(35%
(38%
(35%
+
50,000 to
x amount over
75,000
100,000
335,000
7,500
+
x amount over
x amount over
75,000)
100,000)
335,000)
10,000,000)
15,000,000)
18,333,333)
75,000 to
13,750
22,250
100,000 to
x amount over
335,000 to
10,000,000 to
10,000,000
113,900
+
15,000,000
3,400,000
+
x amount over
15,000,000 to
Over 18,333,333
x amount over
x amount over
18,333,333
5,150,000
6,416,667
+
expand button
Transcribed Image Text:Corporate Tax Rate Schedule Tax calculation Range of taxable income $0 to (Marginal rate x amount over base bracket) $0) 50,000) Base tax + $50,000 $0 x amount over (15% (25% (34% (39% (34% (35% (38% (35% + 50,000 to x amount over 75,000 100,000 335,000 7,500 + x amount over x amount over 75,000) 100,000) 335,000) 10,000,000) 15,000,000) 18,333,333) 75,000 to 13,750 22,250 100,000 to x amount over 335,000 to 10,000,000 to 10,000,000 113,900 + 15,000,000 3,400,000 + x amount over 15,000,000 to Over 18,333,333 x amount over x amount over 18,333,333 5,150,000 6,416,667 +
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