   Chapter 18, Problem 30AT ### Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447

#### Solutions

Chapter
Section ### Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447
Textbook Problem

# You are the lax consultant for Fidelity Manufacturing, Inc. If the company had taxable income of $875,500 last year, calculate:a. Corporate tax liability.b. Net income after taxes. (a) To determine To calculate: The corporate tax liability for the tax consultant of Fidelity Manufacturing, Inc and company has taxable income of$875,500 last year.

Explanation

Given Information:

The company Fidelity Manufacturing, Inc had taxable income of $875,500 last year. Formula used: To calculate the corporate income tax, there are some rules given in the book, using the Corporate Tax Rate Schedule, Exhibit 18-6. Step 1: Read the range of income and check in which range given company’s income is lying. Step 2: Subtract the lower number of the range from the taxable amount. Step 3: Multiply the result from step 2 by the tax rate listed for that range. Step 4: Calculate the tax liability by adding the result from step3 to the dollar amount of tax indicating for that range. Step 5: Find the net income after taxes by subtracting the tax liability from the taxable income. Net income after taxes=Income before taxTax liability Calculation: Fidelity Manufacturing, Inc., had net income before taxes is$875,500.

Step 1: The taxable income falls in the range 335,000 to 10,000,000.

Step 2: Subtract the lower number of the range from the taxable amount.

$875,500335,000$540,500

Step 3: Multiply the result from step 2 by the tax rate listed for that range.

$540,500(Result from step 2)× (b) To determine To calculate: The net income after taxes for the tax consultant of Fidelity Manufacturing, Inc. and company has taxable income of$875,500 last year.

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