Scott Inc.expects to have financial income of $375,000 for 2016 and estimates annual tax credits of $22,500.Included in Scott's income is interest income on municipal securities, which is not taxable, totaling $45,000 and meals and entertainment expenses of $62,500 of which 50% are not deductible under current tax code.Assume that the graduated tax rate schedule is as follows:
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?
$$\begin{array} { l l }
\$ 1 - \$ 100,000 & 15 \% \
\$ 100,001 - 200,000 & 22 \% \
\$ 200,001 - 460,000 & 28 \% \
\$ 460,001 \text { and above } & 30 \%
\end{array}$$ Required:
?
Determine the tax expense for the first quarter, assuming that taxable income is $85,000.

Question

Scott Inc.expects to have financial income of $375,000 for 2016 and estimates annual tax credits of $22,500.Included in Scott's income is interest income on municipal securities, which is not taxable, totaling $45,000 and meals and entertainment expenses of $62,500 of which 50% are not deductible under current tax code.Assume that the graduated tax rate schedule is as follows:
?
?
 $$\begin{array} { l l } 
\$ 1 - \$ 100,000 & 15 \% \
\$ 100,001 - 200,000 & 22 \% \
\$ 200,001 - 460,000 & 28 \% \
\$ 460,001 \text { and above } & 30 \%
\end{array}$$ Required:
?
Determine the tax expense for the first quarter, assuming that taxable income is $85,000.

Quizplus · Accepted Answer

The Answer of Scott Inc.expects to have financial income of $375,000 for 2016 and estimates annual tax credits of $22,500.Included in Scott's income is interest income on municipal securities, which is not taxable, totaling $45,000 and meals and entertainment expenses of $62,500 of which 50% are not deductible under current tax code.Assume that the graduated tax rate schedule is as follows:
?
?
 $$\begin{array} { l l } 
\$ 1 - \$ 100,000 & 15 \% \
\$ 100,001 - 200,000 & 22 \% \
\$ 200,001 - 460,000 & 28 \% \
\$ 460,001 \text { and above } & 30 \%
\end{array}$$ Required:
?
Determine the tax expense for the first quarter, assuming that taxable income is $85,000.

Scott Incexpects to Have Financial Income of $375,000 for 2016 and and Estimates