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?The Robbins Corporation is an oil wholesaler. The firm's sales last year were $ 1.07 million,...

?The Robbins Corporation is an oil wholesaler. The firm's sales last year were $ 1.07 million, with the cost of goods sold equal to $ 630000 The firm paid interest of $238,250 and its cash operating expenses were $102,000. Also, the firm received $41,000 in dividend income from a firm in which the firm owned 22 %of the shares, while paying only $11,000 in dividends to its stockholders. Depreciation expense was $48,000. Use the corporate tax rates shown in the popup window, to compute the firm's tax liability. What are the firm's average and marginal tax rates. The Robbins Corporation's tax liability for the year is

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Answer #1

The average rate of tax is 16.94% which is found by dividing the total tax by total taxable income.

The marginal rate of tax is 25% which is the highest of the slab rates under which the taxable income of the firm falls.

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