The tax rates are as shown below: Taxable Income $0-50,000 50,00175,000 75,001 100,000 100,001 335,000 Tax Rate 158 25% 34% 398 Your firm currently has taxable income of $81,500. How much additional tax will you owe if you increase your taxable income by $22,700?

The tax rates are as shown below: Taxable Income $0-50,000 50,00175,000 75,001 100,000 100,001 335,000 Tax Rate 158 25% 34% 398 Your firm currently has taxable income of $81,500. How much additional tax will you owe if you increase your taxable income by $22,700?

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter2: Financial Statements, Cash Flow,and Taxes

Section: Chapter Questions

Problem 10MC

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Concept explainers

Fringe Benefit Tax

Fringe benefits are in addition to the compensation that companies give to their employees. It is an additional benefit above the stated salary. It helps to keep the employees of the firm motivated as sometimes the only salary is not enough to retain the quality employees of the firm. There are different types of fringe benefits. Fringe benefits are given in both private as well as public enterprises.

Question

The tax rates are as shown below:
Taxable Income
$0-50,000
50,00175,000
75,001 100,000
100,001 335,000
Tax Rate
158
25%
34%
39%
Your firm currently has taxable income of $81,500. How much additional tax will you owe if you increase your taxable income by $22,700?

Multiple Choice
о
O
$7,548
$7,928
$7,718
$7,538
$8,853

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