Jenkin Corporation reported the following for its first two taxable years.Corporate tax rate schedule.Assume that the tax rates for both the years are same. Calculate Jenkin's U.S.tax liability for Year 2.

Question

Jenkin Corporation reported the following for its first two taxable years.Corporate tax rate schedule.Assume that the tax rates for both the years are same.   Calculate Jenkin's U.S.tax liability for Year 2.

Quizplus · Accepted Answer

To calculate Jenkin Corporation's U.S. tax liability for Year 2, we need to find the taxable income for Year 2 and apply the corporate tax rate schedule.

From the given information, we can see that Jenkin Corporation's taxable income for Year 2 is $1,520,000.

Using the corporate tax rate schedule, we can calculate the tax liability as follows:

- First $50,000: 15% = $7,500
- Next $25,000: 25% = $6,250
- Next $25,000: 34% = $8,500
- Next $235,000: 39% = $91,650
- Next $1,140,000: 34% = $387,600

Total tax liability = $7,500 + $6,250 + $8,500 + $91,650 + $387,600 = $501,500

However, we also know that Jenkin Corporation had a tax credit of $273,500 in Year 2.

Thus, the final U.S. tax liability for Year 2 is:

Tax liability - Tax credit = $501,500 - $273,500 = $228,000

Therefore, the best choice is C) $228,000.

Jenkin Corporation Reported the Following for Its First Two Taxable