Question
The Robbins Corporation is an oil wholesaler. The firm's sales last year were 1.07 million, with the cost of goods sold equal to $650,000. The
The Robbins Corporation is an oil wholesaler. The firm's sales last year were 1.07 million, with the cost of goods sold equal to $650,000. The firm paid interest of $213,750 and its cash operating expenses were $105,000. Also, the firm received $43,000 in dividend income from a firm in which the firm owned 22% of the shares, while paying only $15,000 in dividends to its stockholders. The depreciation expense was $50,000. Use the corporate tax rates shown in the popup window to compute the firm's tax liability. What are the firm's average and marginal tax rates?
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%v |
The Robbins Corporation's tax liability for the year?
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