You are the tax consultant for Fidelity Manufacturing Inc If

You are the tax consultant for Fidelity Manufacturing, Inc. If the company had taxable income of $875, 500 last year, calculate: Corporate tax liability. Net income after taxes.

Solution

Solution:

Since no tax rate schedule is provided

therefore taxable income are taxed at a flat rate of 35% on all its income

hence

(A) Corporate tax liability : 35 % of taxable income :

= (35/100)* 875500

= $306425

Answer

(b)

Net income after tax = taxable income - corporate tax liability

= 875500-306425

= $569075

Answer