Last year, Martyn Company had $500,000 in taxable income from its operations, $50,000 in interest income, and $100,000 in dividend income. Using the corporate tax rate table given below, what was the company's tax liability for the year?

Question

Quizplus · Accepted Answer

To calculate the tax liability, we first need to determine the total taxable income. Martyn Company's taxable income from operations is $500,000, interest income is $50,000, and dividend income is $100,000. The total taxable income is $650,000. Using the corporate tax rate table, we calculate the tax liability based on the applicable tax brackets for this total income. The correct tax liability is $197,200.

Last Year, Martyn Company Had $500,000 in Taxable Income from Its