Tatun Inc.pays state income tax at a 5% rate and federal income tax at a 21% rate.Tatun recently engaged in a transaction in Mexico,which levied a $25,200 income tax on the transaction.Tatun's pretax net income for the current year is $1,913,900.Compute Tatun's total income tax burden assuming that:
A.The Mexican tax is nondeductible for state and federal tax purposes.
B.The Mexican tax is deductible for state and federal tax purposes.

Question

Quizplus · Accepted Answer

The Answer of Tatun Inc.pays state income tax at a 5% rate and federal income tax at a 21% rate.Tatun recently engaged in a transaction in Mexico,which levied a $25,200 income tax on the transaction.Tatun's pretax net income for the current year is $1,913,900.Compute Tatun's total income tax burden assuming that:
A.The Mexican tax is nondeductible for state and federal tax purposes.
B.The Mexican tax is deductible for state and federal tax purposes.

Tatun IncPays State Income Tax at a 5% Rate and Federal