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Income tax liability / tax rate

Santo Chili Corporation has sales of $15,000,000 cost of goods sold of $6,000,000, selling and administrative costs of $2,500,000, and depreciation exp of $500,000. Santo paid $200,000 of interest expense and received $150,000 of dividends from other corporations. Santo Chili had a long term captial gain of $400,000 and paid dividends of $250,000 to its common shareholders. Use federal tax rates that are provided in Table below.

Show all work.

a. Calculate the federal income tax liability for Santo Chili Corp
b. Calculate the marginal and average tax rates fr Santo Chili Corp table reads across the following 4 topics separated by /

If a Corp tax income is/ pays this Amt on base bracket/ plus this % on the excess base/ average tax rate at top bracket up to 50k/ $0/15%/15.0% 50k to 75k/ $7500/25%/18.3% 75k to 100k/ $13750/34%/22.3% 100k to 335k/ $22250/39%/34% 335k to 10,000,000/ $113,900/34% 335k to 10,000,000/ $113,900/34%/34%

Solution Summary

The solution explains how to calculate the income tax liability and the average and marginal tax rates