Question

2013 Individual Tax Rates
Single Individuals
If a Corporation's Taxable Income Is	It Pays This Amount on the Base of the Bracket	Plus This Percentage on the Excess over the Base (Marginal Rate)	Average Tax Rate at Top of Bracket
Up to $8,925	$0	10.0%	10.0%
$8,925 - $36,250	892.50	15.0	13.8
$36,250 - $87,850	4,991.25	25.0	20.4
$87,850 - $183,250	17,891.25	28.0	24.3
$183,250 - $398,350	44,603.25	33.0	29.0
$398,350 - $400,000	115,586.25	35.0	29.0
Over $400,000	116,163.75	39.6	39.6

Standard deduction for individual: $6,100

Married Couples Filing Joint Returns
If a Corporation's Taxable Income Is	It Pays This Amount on the Base of the Bracket	Plus This Percentage on the Excess over the Base (Marginal Rate)	Average Tax Rate at Top of Bracket
Up to $17,850	$0	10.0%	10.0%
$17,850 - $72,500	1,785.00	15.0	13.8
$72,500 - $146,400	9,982.50	25.0	19.4
$146,400 - $223,050	28,457.50	28.0	22.4
$223,050 - $398,350	49,919.50	33.0	27.1
$398,350 - $450,000	107,768.50	35.0	28.0
Over $450,000	125,846.00	39.6	39.6

Standard deduction for married couples filing jointly: $12,200

Quantitative Problem: Jenna is a single taxpayer with no dependents so she qualifies for one personal exemption. During 2013, she earned wages of $115,000. She doesn't itemize deductions, so she will take the standard deduction and her personal exemption to calculate 2013 taxable income. In addition, during the year she sold common stock that she had owned for five years for a net profit of $5,600. How much does Jenna owe to the IRS for taxes? Round your intermediated and final answers to the nearest cent.

=???

2013 Corporate Tax Rates
If a Corporation's Taxable Income Is	It Pays This Amount on the Base of the Bracket	Plus This Percentage on the Excess over the Base (Marginal Rate)	Average Tax Rate at Top of Bracket
Up to $50,000	$0	15.0%	15.0%
$50,000 - $75,000	7,500	25.0	18.3
$75,000 - $100,000	13,750	34.0	22.3
$100,000 - $335,000	22,250	39.0	34.0
$335,000 - $10,000,000	113,900	34.0	34.0
$10,000,000 - $15,000,000	3,400,000	35.0	34.3
$15,000,000 - $18,333,333	5,150,000	38.0	35.0
Over $18,333,333	6,416,667	35.0	35.0

Quantitative Problem: Andrews Corporation has income from operations of $246,000. In addition, it received interest income of $24,600 and received dividend income of $29,000 from another corporation. Finally, it paid $9,100 of interest income to its bondholders and paid $45,200 of dividends to its common stockholders. Using the 2013 corporate tax schedule, what is the firm’s federal income tax? Round your intermediated and final answers to the nearest cent.

=???

Answer 1

Income from operations	$   2,46,000
Add:
Interest income	$       24,600
Taxable portion of dividend income = 29000*30% =	$         8,700
Less:
Interest expense	$         9,100
Taxable income	$   2,70,200
Federal income tax = 22250+(270200-100000)*39% =	$       88,628