Monday 9 September 2013

The SGS Co. had $131,000 in taxable income. Use the rates from Table 2.3. (Enter your answer as directed, but do not round intermediate calculations.) Required: Calculate the company’s income taxes. Income taxes $ Explanation: Using Table 2.3, we can see the marginal tax schedule. The first $50,000 of income is taxed at 15 percent, the next $25,000 is taxed at 25 percent, the next $25,000 is taxed at 34 percent, and the next $31,000 is taxed at 39 percent. So, the total taxes for the company will be: Taxes = 0.15($50,000) + 0.25($25,000) + 0.34($25,000) + 0.39($131,000 – 100,000) Taxes = $34,340

The SGS Co. had $131,000 in taxable income. Use the rates from Table 2.3. (Enter your answer as directed, but do not round intermediate calculations.)  

Required:
Calculate the company’s income taxes.
 
  Income taxes $  

 
Here is the Table 2.3
http://lectures.mhhe.com/connect/0073382469/Images/table2.3.jpg
Explanation:
Using Table 2.3, we can see the marginal tax schedule. The first $50,000 of income is taxed at 15 percent, the next $25,000 is taxed at 25 percent, the next $25,000 is taxed at 34 percent, and the next $31,000 is taxed at 39 percent. So, the total taxes for the company will be:
 
Taxes = 0.15($50,000) + 0.25($25,000) + 0.34($25,000) + 0.39($131,000 – 100,000)
Taxes = $34,340  

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