Question

If Congress voted to eliminate corporate taxes, what would be the effect on Amazon's income statement and balance sheet? Show an example of the income statement and balance sheet from 2017 to support answer.

Answer 1

If congress eliminates the corporate taxes for Amazon there would not be much effect on the Income Statement but therer will be more profits will be transfered to the reserves and surplus accounts that would eventually means more money for the shareholder of the company because of this companies capital Adequacy ratio will be high that means comapnay will be able to absorbs more losses from there permanent capital which from the investers point of view is great. If corporate taxes are eliminated company will have more income for the purpose for Research & development purpose and also to higher more people this would also help to reduce the employment rate in the country will reduce. One the best part of this will be that comapny will be able to compete globally more effeciently becuase more income available to distribute to other branches with more potential with almost zero cost because this is coming from the permanent funds.

As you can clearly see the the difference of profit that is avialable for distribution to the shareholders .