Question

For Amazon in 2018, If Congress voted to eliminate corporate taxes, what would be the effect...

For Amazon in 2018, If Congress voted to eliminate corporate taxes, what would be the effect on Amazon's income statement and balance sheet? Defend your response. Calculate the income tax rate Amazon in 2018 and 2017. What effect will an increase in income of $2,000,000 have on Amazon in 2018? What are the effects on the balance sheet and income statement for Amazon? Justify your response. How much did Amazon pay in foreign taxes last year? What percentage of Amazons income is United States vs. foreign?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

If Congress eliminated corporate Taxes Amazon will end up saving millions on taxes paid by it, which will in turn increase its distributable profit and a better working capital with improved net worth.

Effective tax rate of Domestic taxes was around 13% for Amazon in 2017, with elimination of corporate taxes Income tax rate for 2018 will be NIL.

Increase in income will result in Increase in profit by effective tax rate amount ($2000000*13%)= $260000

Amazon paid $724 million in foreign taxes in 2017 as compared to $45million for domestic tax.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Multiple Choice Question 58 An analysis of the machinery accounts of Sunland Company for 2018 is...
Multiple Choice Question 58 An analysis of the machinery accounts of Sunland Company for 2018 is as follows: Machinery, Net of Accumulated Accumulated Machinery Depreciation Depreciation Balance at January 1, 2018 $490000 $126000 $364000 Purchases of new machinery in 2018 for cash 210000 — 210000 Depreciation in 2018 — 102000 (102000 ) Balance at Dec. 31, 2018 $700000 $228000 $472000 The information concerning Sunland's machinery accounts should be shown in Sunland's statement of cash flows (indirect method) for the year...
A 7-year municipal bond yields 4.80%. Your marginal tax rate (including state and federal taxes) is...
A 7-year municipal bond yields 4.80%. Your marginal tax rate (including state and federal taxes) is 36.00%. What interest rate on a 7-year corporate bond of equal risk would provide you with the same after-tax return? (Round your final answer to two decimal places.) a. 6.45% b. 6.08% c. 9.08% d. 9.30% e. 7.50% Exhibit 4.1 The balance sheet and income statement shown below are for Koski Inc. Note that the firm has no amortization charges, it does not lease...
Explain whether each of the following events would increase, decrease, or have no effect on the...
Explain whether each of the following events would increase, decrease, or have no effect on the short-run aggregate demand curve: a. A decrease in the U.S. price level makes American goods more attractive to foreign buyers. b. Households decide to consume a larger share of their income. c. Worsening profit expectations cause firms to decrease their expenditures on new machinery and equipment. d. As the price level declines, the purchasing power of currency increases, and thus Americans increase their purchases...
The most recent financial statements for Crosby Inc., follow. Sales for 2018 are projected to grow...
The most recent financial statements for Crosby Inc., follow. Sales for 2018 are projected to grow by 20 percent. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets and accounts payable increase spontaneously with sales. CROSBY, INC. 2017 Income Statement   Sales $763,000   Costs 598,000   Other expenses 34,000   Earnings before interest and taxes $131,000   Interest paid 30,000   Taxable income $101,000   Taxes (25%) 25,250   Net income $75,750 Dividends $23,483...
What would be the muilti step income statement and retained earning statement?   Paige Co. is a...
What would be the muilti step income statement and retained earning statement?   Paige Co. is a niche furniture manufacturer and retailer who operates mainly in the Carolinas. A partial trial balance showing Paige’s equity, revenue and expense balances as of its    year-end follows:     Debits              Credits Dividends                                                                     $   274,520 Retained earnings (1/1/19)                                                                     $   714,830 Unrealized holding gain – CKB bonds (1/1/19)                                              89,145 Interest revenue                                                                                         21,690 Sales revenue                                                                                       ...
PROBLEM 1: The 2018 and 2019 comparative balance sheets and 2019 income statement for Edmond &...
PROBLEM 1: The 2018 and 2019 comparative balance sheets and 2019 income statement for Edmond & Edmond Company appear below: EDMOND & EDMOND COMPANY Comparative Balance Sheet December 31                                                                                                                    2019                    2018     Assets Cash                                                                                                      $ 26,000            $ 23,000 Accounts receivable                                                                                  25,000                34,000 Merchandise inventory                                                                              32,000                15,000 Property, plant, and equipment                                                                 60,000                78,000 Accumulated depreciation                                                                        (21,000)              (24,000)          Total                                                                                              $122,000            $126,000 Liabilities and Stockholders' Equity Accounts payable                                                                                  $ 18,000            $ 23,000 Income taxes payable                                                                                 9,000                  8,000...
How would you respond to the two posts made by Ben about the balance sheet and...
How would you respond to the two posts made by Ben about the balance sheet and financial statement they summarized from the companies they have chosen ? What do you agree or disagree with about their posts? what opinions and information would you like to add in your response about their posts? Write a response for each post. response should be 200 words. Ben As per the SEC 10-K Report, Netflix (NFLX) is currently the world’s leading subscription steaming entertainment...
he following information appeared in the trial balance for Base Corp. as of December 31, 2018...
he following information appeared in the trial balance for Base Corp. as of December 31, 2018 (in thousands): Sales                                           21950 Cost of goods sold                      16375 Selling expenses                           1845 General & admin expense             1025 Interest revenue                              162 Interest expense                              387 Income tax rate                               28% Income taxes have not yet been accrued and these items, above, appear in the income statement of the company every year. The Controller asks you to assess the appropriate treatment for several other nonrecurring transactions, as identified...
Directions: Ratio Calculation, use formulas to calculate the following financial indicators for each year of data:...
Directions: Ratio Calculation, use formulas to calculate the following financial indicators for each year of data: o Current ratio o Debt/equity ratio o Free cash flow o Earnings per share o Price/earnings ratio o Return on equity o Net profit margin o Describe how and why each of the ratios has changed over the three-year period. For example, did the current ratio increase or decrease? Why? Describe how three of the ratios you calculated for your company compare to the...
1- Many U.S. firms with a large percentage of their revenues derived in foreign countries prefer...
1- Many U.S. firms with a large percentage of their revenues derived in foreign countries prefer to leave their cash outside the United States because using those funds to pay dividends or purchase treasury stock would Select one: a. promote foreign investment. b. require a big U.S. corporate income tax payment. c. create pressure for decreased exporting. d. decrease foreign exchange. e. inflate stock prices. 2- In projected financial statements, what is used as a plug figure? Select one: a....
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT