Tatun Inc Pays State Income Tax at a 5% Rate and and Federal

Tatun Inc. pays state income tax at a 5% rate and federal income tax at a 34% 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. Tatun's state tax is $95,695 ($1,913,900 * 5%), and its federal tax is $618,190 ([$1,913,900 - $95,695 deduction for state tax] * 34%). Tatun's total income tax burden is $739,085 ($95,695 state tax + $618,190 federal tax + $25,200 Mexican tax).A. The Mexican tax is nondeductible for state and federal tax purposes.B. Tatun's state tax is $94,435 ([$1,913,900 - $25,200 deduction for Mexican tax] * 5%), and its federal tax is $610,050 ([$1,913,900 - $94,435 deduction for state tax - $25,200 deduction for Mexican tax] * 34%). Tatun's total income tax burden is $729,685 ($94,435 state tax + $610,050 federal tax + $25,200 Mexican tax).B. The Mexican tax is deductible for state and federal tax purposes.