Computing income taxes

the william b. waugh corporation is a regional toyota dealer. the firm sells new and used trucks and is actively involved in the parts business. during the most recent year, the company generated sales of 3.13 million . the combined cost of goods sold and the operating expenses were $2.08 million . also, 377,000

in interest expense was paid during the year. calculate thecorporation's tax liability by using the corporate tax rate structure in the popup window,

corporate tax rates

15%

$0long dash—$50,000

25%

$50,001long dash—$75,000

34%

$75,001long dash—$10,000,000

35%

over $10,000,000

  additional surtax:

   5% on income between $100,000 and$335,000
3% on income between $15,000,000 and $18,333,333
.

the corporation's tax liability is

The corporation's tax liability is $ 228,820.

Explanation:

To calculate tax liability we first have to find net profit. Detail calculation is given below.

Net profit Calculation

Sales                                                                                 $ 3,130,000

cost of goods sold and the operating expenses          ($ 2,080,000)

Interest expense                                                              ( $ 377,000)

Net profit                                                                           $ 673,000

Tax liability Calculation

Income fall under Tax bracket of  34%  ($75,001 to $10,000,0000 for corporate tax. No additional surtax will be charged as income do not fall under its net.

Tax liabilty = 673,000 * 34% = $ 228,820

answer; foreign exchange transaction;

answer; charters;