Sales for J. P. Hulett Inc. during the past year amounted to $3.6million. Gross profits totaled $1.01 million, and operating and depreciation expenses were $499,000 and $348,000, respectively. Dividend income for the year was $14,000, which was paid by a firm in which Hulett owns

85

percent of the shares. Use the corporate tax rates shown:

Taxable Income Marginal Tax Rate

$0$50,000 15%

$50,001$75,000 25%

$75,001$100,000 34%

$100,001$335,000 39%

$335,001$10,000,000 34%

$10,000,001$15,000,000 35%

$15,000,001$18,333,333 38%

Over $18,333,333 35%

to Comcute thecorporation's tax liability. What are the firm's average and marginal tax rates?

The firm's tax liability for the year is

$