Green corporation has the following income and expense items for Year 1. Sales revenue (all cash): $750,000 City of Flint bond interest: $100,000 Microsoft bond interest: $50,000 Wage expenses: $400,000 Do not calculate Green's tax liability and just assume Green's total tax liability in Year 1 is $100,000. Determine Green's effective tax rate (ETR) for Year 1.

SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter13: Corporations: Earning & Profits And Distributions
Section: Chapter Questions
Problem 20P
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Green corporation has the following income and expense items for Year 1. Sales revenue (all cash): $750,000 City of Flint bond interest: $100,000 Microsoft bond interest: $50,000 Wage expenses: $400,000

Do not calculate Green's tax liability and just assume Green's total tax liability in Year 1 is $100,000. Determine Green's effective tax rate (ETR) for Year 1.

Instructions: If the answer is 0.11, write 0.110. (This is not the correct answer). Round to the 3rd decimal place.

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