During 2010 Silas Inc. had sales revenue $564,000, gross profit $264,000, operating expenses $99,000, cash dividends $45,000, other expenses and losses $30,000. Its corporate tax rate is 30%. What was Silas's income tax expense for the year?

Question

Quizplus · Accepted Answer

To calculate the income tax expense, first determine the income before tax: Gross Profit ($264,000) - Operating Expenses ($99,000) - Other Expenses and Losses ($30,000) = $135,000. Then, apply the tax rate: $135,000 * 30% = $40,500.