Question
In: Accounting
Compute SWK Inc.’s tax liability for each of the following scenarios: (Use Corporate Tax Rate Table.)...
Compute SWK Inc.’s tax liability for each of the following scenarios: (Use Corporate Tax Rate Table.)
a. SWK’s taxable income is $60,000.
b. SWK’s taxable income is $275,000.
c. SWK’s taxable income is $15,500,000.
d. SWK’s taxable income for the year is $50,000,000.
Solutions
Expert Solution
| Compute SWK Inc.’s tax liability | ||||||||
| Tax rates | ||||||||
| Taxable income from | But Not More than | Tax rate | ||||||
| $0 | $50000 | 15% | ||||||
| $50001 | $75000 | 25% | ||||||
| $75001 | $100000 | 34% | ||||||
| $100001 | $335000 | 39% | ||||||
| $335001 | $10,000,000 | 34% | ||||||
| $10,000,001 | $15,000,000 | 35% | ||||||
| $15000,001 | $18,333,333 | 38% | ||||||
| $18,333,334 | 35% | |||||||
| (a)SWK’s taxable income is $60,000 | ||||||||
| Tax Liability =$50,000*15% +$10,000 *25% =$7500+$2500 =$10,000 | ||||||||
| (b) SWK’s taxable income is $275,000 | ||||||||
| Tax Liability =$50,000*15% + $25000 *25% +$25000*34% +$175000*39% =$7500+$6250+$8500+$68250 =$90500 | ||||||||
| © SWK’s taxable income is $15,500,000 | ||||||||
| Tax liability = $10,000,000*34% +$5000,000 *35% +$500,000*38% =$3,400,000+$1,750,000 +$190,000 =$5340,000 | ||||||||
| (D) SWK’s taxable income for the year is $50,000,000. | ||||||||
| Tax Liability =$50,000,000*35% =$17,500,000 | ||||||||
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