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Two companies A and B have the same revenues and expenses and both are subject to taxes at the rate of 30% . The accounting
Two companies A and B have the same revenues and expenses and both are subject to taxes at the rate of 30% . The accounting Income Statement for the two companies is as follows
However , assets in the two companies are subject to different Capital Contribution Rates amounting to $250,000 for A and 350,000 for B. What are the taxes paid by each of these two companies ?
\begin{tabular}{lr} \multicolumn{2}{c}{ Income Staterment } \\ \hline Revenue & $1,000,000 \\ \hline Le55: Cost of Goods Sold & 200,000 \\ Admin Expense & 100,000 \\ Depreciation & 200,000 \\ \hline Dperating Profit & 500,000 \\ Le5s: Interest Expense & 200,000 \\ Taxes(30\%) & 90,000 \\ \hline Net Income & 210,000 \\ \hline \end{tabular}
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