Given the following tax schedule, what is the tax liability for a corporation wi

ID: 2823779 • Letter: G

Question

Given the following tax schedule, what is the tax liability for a corporation with taxable income of $8 million
Corporate Tax Rates. Taxable Income 15%. $0-50,000 25%. $50,001-75,000 34%. $75,001-10,000,000 35%. Over $10,000,000
A $2,715,000 B $2,720,000 C $2,694,500 D $2,708,250 Given the following tax schedule, what is the tax liability for a corporation with taxable income of $8 million
Corporate Tax Rates. Taxable Income 15%. $0-50,000 25%. $50,001-75,000 34%. $75,001-10,000,000 35%. Over $10,000,000
A $2,715,000 B $2,720,000 C $2,694,500 D $2,708,250
Corporate Tax Rates. Taxable Income 15%. $0-50,000 25%. $50,001-75,000 34%. $75,001-10,000,000 35%. Over $10,000,000
A $2,715,000 B $2,720,000 C $2,694,500 D $2,708,250

Explanation / Answer

Correct option is > D $2,708,250

Tax rate

Income (Split of $8 m)

Income x Tax rate

15%

$50,000.00

$7,500.00

25%

$25,000.00

$6,250.00

34%

$7,925,000.00

$2,694,500.00

Total = Taxability =

$2,708,250.00

$8 million will be split in three parts as per slab:

$50000 ; $ 25000 and Balance $7925000 ($8000000-$50000-$25000)

15%*50000 + 25%*25000 + 34%*7925000