Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribed
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 $1,000,000 Less: Cost of Goods Sold 200,000 Admin Expense 100,000 Depreciation 200,000 Operating Profit 500,000 Less: Interest Expense 200,000 Taxes (30%) 90,000 Net Income $ 210,000 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 in this fiscal year by each of these two companies

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Intelligence

Authors: Income Mastery

1st Edition

1647773210, 978-1647773212

More Books

Students also viewed these Finance questions