The Dakota Corporation had a 2015 taxable income of $5,700,000 from operations after all operating costs but before (1) interest charges of $1,300,000, (2) dividends received of $96,000, (3) dividends paid of $760,000, and (4) income taxes.

a.Use the tax schedule inTable 2.3to calculate Dakota's income tax liability.

Amount tax liability 113,900

Percentage over base 34%

Income Tax Liability

b.What are Dakota's average and marginal tax rates on taxable income?

Averate tax

Marginal Tax