Question

# (Corporate income tax​) Boisjoly Productions had taxable income of ​\$ 19.5million. a. Calculate​ Boisjoly's federal income...

(Corporate income tax​) Boisjoly Productions had taxable income of ​\$ 19.5million.

a. Calculate​ Boisjoly's federal income taxes by using the corporate tax rate structure in the popup​ window, LOADING....

b. Now calculate​ Boisjoly's average and marginal tax rates.

c. What would​ Boisjoly's federal income taxes be if its taxable income was ​\$ ​million?

d. Now calculate​ Boisjoly's average and marginal tax rates with taxable income of ​\$ million.

a. Calculate​ Boisjoly's federal income taxes.

The total tax due is ​\$

 Corporate Tax Rates ​ 15% ​\$0—​\$50,000 ​ 25% ​\$50,001—​\$75,000 ​ 34% ​\$75,001—​\$10,000,000 ​ 35% over​ \$10,000,000 Additional​ surtax: • ​5% on income between​ \$100,000 and​ \$335,000 • ​3% on income between​ \$15,000,000 and​ \$18,333,333 ​(Click on the icon located on the​ top-right corner of the data table above in order to copy its contents into a spreadsheet.​)

a). Tax Liability = Taxable Income * Tax Rate

= [\$50,000 * 0.15] + [(\$75,000 - \$50,000) * 0.25] + [(\$10,000,000 - \$75,000) * 0.34] + [(\$19,500,000 - \$10,000,000) * 0.35] + [(\$335,000 - \$100,000) * 0.05] + [(\$18,333,333 - \$15,000,000) * 0.03]

= \$7,500 + \$6,250 + \$3,068,500 + \$3,325,000 + \$11,750 + \$100,000 = \$6,519,000

b). Average Tax Rate = Tax LIability / Taxable Income

= \$6,519,000 / \$19,500,000 = 0.3343, or 33.43%

Marginal Tax Rate = 35%

As the tax rate charged on the next earned dollar is 35%

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