Question

# Microchip Inc. had the following profits and losses in the years indicated. 2013 \$  5,500,000 2014 350,000...

Microchip Inc. had the following profits and losses in the years indicated.

 2013 \$  5,500,000 2014 350,000 2015 (4,000,000)
 Corporate Income Tax Schedule Income (\$) Rate (%) 0 - 50,000 15 50,000 - 75,000 25 75,000 - 100,000 34 100,000 - 335,000 39 335,000 - 10,000,000 34 10,000,000 - 15,000,000 35 15,000,000 - 18,333,333 38 Over 18,333,333 35

How much federal tax will it eventually pay for 2013? The corporate rate schedule is the same for all three years. Use carry back to 2013 year. Round the answer to the nearest dollar.

Federal tax will it eventually pay for 2013

Microchip Inc. had profit in 2013 - \$ 5,500,000

here is the given Corporate Income Tax Schedule and it is the same for all three years

 Corporate Income Tax Schedule Income (\$) Rate (%) 0 - 50,000 15 50,000 - 75,000 25 75,000 - 100,000 34 100,000 - 335,000 39 335,000 - 10,000,000 34 10,000,000 - 15,000,000 35 15,000,000 - 18,333,333 38 Over 18,333,333 35

calculation of federal tax for the 2013 profit of \$ 5,500,000

Tax upto 50,000 = 50,000*15% = \$7,500

Tax from 50,000 - 75,000 = 25,000*25% = \$ 6,250

Tax from 75,000 - 100,000 = 25,000*34% = \$ 8,500

Tax from 100,000 - 335,000 = 235,000*39% = \$ 91,650

Tax from 335,000 - 5,500,000 = 5,165,000*34% = \$1,756,100

Federal tax =\$ 7,500+ \$ 6,250 + \$ 8,500 + \$ 91,650 + \$ 1,756,100

= \$ 1,870,000

#### Earn Coins

Coins can be redeemed for fabulous gifts.