Question 1

KARVA Corporation had a net income before taxes of $11,440,300. First find the tax liability using the Corporate Tax Rate Schedule, Exhibit 18-6 from your text, then calculate the net income after taxes.

Accepted Answer

To find the tax liability, apply the corporate tax rates to the income of $11,440,300. After calculating the taxes owed, subtract this amount from the net income before taxes to find the net income after taxes, which is $7,536,195.

Question 2

Nancy Logan purchased a diamond bracelet for $12,600 at Craig Jewelers. The state sales tax is 7% and the federal excise tax on this type of jewelry is 10%. What is the total purchase price of the bracelet? (Round your answer to the nearest cent if necessary)

Accepted Answer

The answer of Nancy Logan purchased a diamond bracelet for...

Question 3

Suppose you bought a digital camera for a total purchase price of $276.99. If state taxes were 6.2%, what was the amount of the sales tax?

Accepted Answer

To find the sales tax amount, multiply the purchase price by the tax rate: $276.99 * 0.062 = $17.1738, which rounds to $16.17.

Question 4

Pet Palace had a net income before taxes of $1,615,200. First find the tax liability using the Corporate Tax Rate Schedule, Exhibit 18-6 from your text, then calculate the net income after taxes.

Accepted Answer

The tax liability for Pet Palace, based on the Corporate Tax Rate Schedule, would be calculated as follows: The first $50,000 is taxed at 15%, the next $25,000 is taxed at 25%, the next $25,000 is taxed at 34%, and any amount over $335,000 is taxed at 34%. However, there's an additional tax for incomes over $100,000, which effectively increases the marginal tax rate on income between $100,000 and $335,000, and incomes over $10,000,000 are taxed at 35%. Given the net income before taxes of $1,615,200, the company falls into the highest tax bracket. The exact calculation depends on the specific tax rates and brackets provided in the Corporate Tax Rate Schedule from the text, which are not provided here. However, assuming a progressive tax structure similar to the U.S. federal corporate tax rates prior to the Tax Cuts and Jobs Act of 2017, the tax would be calculated on a graduated scale. After calculating the tax, the net income after taxes is obtained by subtracting the tax liability from the net income before taxes. Without the exact tax brackets and rates from the provided schedule, we can't calculate the exact tax liability here, but the correct answer from the options given, based on the information provided, is C) $1,066,032, assuming this reflects the correct calculation based on the tax schedule referenced.

Question 5

Reynaldo purchases a scooter costing $112.95. State taxes are 6% and local sales taxes are 2.6%. The store charges $25 for assembly. What is the total purchase price? (Round your answer to the nearest cent if necessary)

Accepted Answer

The answer of Reynaldo purchases a scooter costing $112.95. State...

Question 6

David Cloud purchased a lawn mower for a total purchase price of $318.75. The state has a $6 \frac { 1 } { 4 } \%$ sales tax. What was the selling price of the lawn mower?

Accepted Answer

The answer of David Cloud purchased a lawn mower for...

Question 7

You buy a breakfast roll costing $3.45. If the state tax rate is 5.25%, what is the tax? (Round your answer to the nearest cent if necessary)

Accepted Answer

The answer of You buy a breakfast roll costing $3.45....

Question 8

Kelly Greene bought a new dining set for a total purchase price of $3,954.75. The state has a 6.15% sales tax. What was the amount of sales tax? (Round your answer to the nearest cent if necessary)

Accepted Answer

The answer of Kelly Greene bought a new dining set...

Question 9

You buy fishing equipment costing $278. State taxes are 5.5% and the federal excise tax on this item is 12.45%. What is the total purchase price? (Round your answer to the nearest cent if necessary)

Accepted Answer

The total purchase price is calculated by adding the state tax and federal excise tax to the original cost: $278 + ($278 * 0.055) + ($278 * 0.1245) = $327.90.

Question 10

E J owns some property that has an assessed value of $432,920. Calculate the tax due if the tax rate is 32.25 mills.

Accepted Answer

The tax due is calculated by multiplying the assessed value by the tax rate (in decimal form). The tax rate of 32.25 mills is equivalent to 0.03225 (since 1 mill = 0.001). Therefore, the tax due is $432,920 * 0.03225 = $13,961.67.

Question 11

Anne and her husband purchase a two-week all inclusive vacation costing $14,500. State taxes are 4.5% and the federal excise tax is 14%. What is the total purchase price of their vacation? (Round your answer to the nearest cent if necessary)

Accepted Answer

The answer of Anne and her husband purchase a two-week...

Question 12

Kris purchases a lawn mower costing $123.95. State taxes are 5.5% and local sales taxes are 1.5%. The store charges $15 for assembly and $20 for delivery. What is the total purchase price? (Round your answer to the nearest cent if necessary)

Accepted Answer

The answer of Kris purchases a lawn mower costing $123.95....

Question 13

Sherrie purchases a sports car costing $72,500. State taxes are 4.5% and federal excise tax is 14%. What is the total purchase price?

Accepted Answer

The total purchase price includes the base price plus state and federal taxes. State tax is 4.5% of $72,500, which is $3,262.50. Federal excise tax is 14% of $72,500, which is $10,150. Adding these to the base price: $72,500 + $3,262.50 + $10,150 = $85,912.50.

Question 14

John Swift purchased a truck for $23,800. The dealer prep charges are $318 and the sales tax rate is $5 \frac { 1 } { 2 } \%$ . 
A)What is the amount of sales tax?
B)What is the total purchase price of the truck?

Accepted Answer

The answer of John Swift purchased a truck for $23,800....

Question 15

Caterina is single. Her taxable income is $59,541. Find the tax liability using the Tax Table, Exhibit 18-3 from your text.

Accepted Answer

The answer of Caterina is single. Her taxable income is...

Question 16

The state excise tax on gasoline is 24.1 cents per gallon. If Kirkpatricks Van Lines used a total of 23,824 gallons of fuel last month, how much excise tax was paid? (Round your answer to the nearest cent if necessary)

Accepted Answer

The answer of The state excise tax on gasoline is...

Question 17

Jen's Boutique had total sales for the day of $1,464.75 including sales tax. The tax rate was $8 \frac { 1 } { 2 } \%$ . 
A)What was the amount of Jen's actual sales revenue for the day?
B)What is the amount of sales tax that must be sent to the state Department of Revenue?

Accepted Answer

The answer of Jen's Boutique had total sales for the...

Question 18

Jamie and Wayne are married and filing jointly. Their taxable income is $189,346. Use the Tax Rate Schedule, Exhibit 18-4 from your text, to find their tax liability.

Accepted Answer

To find their tax liability, you need to use the tax rate schedule for married couples filing jointly. Based on the 2023 tax brackets, their income falls into the 24% bracket. Calculate the tax for each bracket up to their income, and sum it up to get $40,263.88.

Question 19

You are the accountant for a corporation whose net income before taxes was $13,741,400. Find the tax liability using the Corporate Tax Rate Schedule, Exhibit 18-6 from your text.

Accepted Answer

The tax liability is calculated using the Corporate Tax Rate Schedule. The correct tax liability for a net income before taxes of $13,741,400 is $4,709,490.

Question 20

Budget planners for a certain community have determined that $3,415,200 will be required to provide all government services next year. The total assessed property value in the community is $24,700,000. What tax rate is required to meet the budgetary demands? (Express your answer as a tax rate per $100 and round to the nearest hundredth)

Accepted Answer

To find the tax rate per $100, divide the total required budget by the total assessed property value and then multiply by 100. This gives ($3,415,200 / $24,700,000) * 100 = 13.83.

Quiz 18: Taxes