The taxable income, marginal tax rate, tax expense, post-tax income, and average tax rate.

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Chapter 2, Problem 7P

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To determine: The taxable income, marginal tax rate, tax expense, post-tax income, and average tax rate.

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Based on the information provided, answer the following questions: A. A firm has a taxable income of $16.2 million, its marginal tax rate is? B. A firm has a taxable income of $16.2 million, its average tax rate is?

1 Calculate the Tax implications if the company has earnings before taxes of $ 350,000.00 Both if the company is a Corporation or Sole proprietorship What is the total taxes, average rate and the marginal tax rate Corporate Tax Rate: Total Taxes as Coorporation Personal Marginal Income Tax Rates: Single: Taxable Income Over--- 0 9,525 38,700 82,500 157,500 200,000 500,000 Total Tax Paid Marginal Tax Rate Average Tax Rate Taxable Income 350000 But not over Over--- 0 9,525 38,700 82,500 157,500 200,000 500,000 === 9,525 38,700 82,500 157,500 200,000 500,000 But not over --- 9,525 38,700 82,500 157,500 200,000 500,000 Marginal Tax Rate 10% 12% 22% 24% 32% 35% 37% Marginal Tax Rate 10% 12% 22% 24% 32% 35% 37% 21% Difference Incremental Taxes Cumulative Taxes

2. Table is given below shows that marginal tax rates for Alejandro Corporation. Taxable Income of the Company is equal to $44.000. How much will the Company pay tax totally? Average tax rate? ( NOTE: PLEASE SHOW HOW YOU COMPUTE EACH OF THE ITEMS. Taxable Income (S) Tax Rate 0 - 16.000 10% 16.000 - 39.000 12% 39.000-55.000 16% 55.000 – 70.000 19% 70.000- 86.000 23%