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

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