Question
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: Income Statement Revenue Less: Cost of Goods Sold Admin Expense Depreciation Operating Profit Less: Interest Expense Taxes (30%) Net Income $1,000,000 200,000 100,000 200,000 500,000 200,000 90,000 $ 210,000 However, assets in the two companies are subject to different Capital Cost Allowance rates amounting to $250,000 for A and 350,000 for B. What are the taxes paid by each of these two companies in this fiscal year?
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University Physics with Modern Physics
Authors: Hugh D. Young, Roger A. Freedman, Lewis Ford
12th Edition
978-0321501479, 9780805321876, 321501470, 978-0321501219
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