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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.

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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

$2.19