Compute SWK Incs tax liability for each of the following sce

Compute SWK Inc.’s tax liability for each of the following scenarios: (Use Corporate Tax Rate Table.)

a. SWK’s taxable income is $60,000.

b. SWK’s taxable income is $275,000.

c. SWK’s taxable income is $15,500,000.

d. SWK’s taxable income for the year is $50,000,000.

Solution

Compute SWK Inc.’s tax liability Tax rates Taxable income from But Not More than Tax rate $0 $50000 15% $50001 $75000 25% $75001 $100000 34% $100001 $335000 39% $335001 $10,000,000 34% $10,000,001 $15,000,000 35% $15000,001 $18,333,333 38% $18,333,334 35% (a)SWK’s taxable income is $60,000 Tax Liability =$50,000*15% +$10,000 *25% =$7500+$2500 =$10,000 (b) SWK’s taxable income is $275,000 Tax Liability =$50,000*15% + $25000 *25% +$25000*34% +$175000*39% =$7500+$6250+$8500+$68250 =$90500 © SWK’s taxable income is $15,500,000 Tax liability = $10,000,000*34% +$5000,000 *35% +$500,000*38% =$3,400,000+$1,750,000 +$190,000 =$5340,000 (D) SWK’s taxable income for the year is $50,000,000. Tax Liability =$50,000,000*35% =$17,500,000