Accounting Calculations Essay (Essay Sample)

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Calculate for the following corporation:
Operating profit $1,000,000
Other income
Add interest received $25, 000
Preferred divided received $50,000
Total incomes $1,075,000
Less expense
Interest rate $(250,000)
Profit before tax (taxable income) $825,000
Tax liability (if 35%) $288,750
After tax income $536,250
d, Average tax is given by: (paid tax/taxable income)*(100)
(288,750/825,000)*100 = 35%
e, Marginal tax rate, is the rate paid on the last $ of income generated. Hence, marginal tax rate for this case is 34%. Corporation’s taxable income for the marginal rate is as follows,
Taxable income Tax rate
0 to 50,00015%50,000 to 75,000$ 7,500 +25% 75,000 to 100,000$13,750 + 34% 100,000 to 335,000$22,250 + 39% 335,000 to 10,000,000$113,900 + 34% 10,000,000 to 15,000,000$3,400,000 + 35% 15,000,000 to 18,333,333$5,150,000 + 38% 18,333,333 and up35%
2a.) Sale price of goods $ 10,000
Less Cost of goods sold 35% * $ 10,000 = $ 3,500
Unrealized profit $ 6,500
Decrease Profit by $ 10,000 in income statement
Increase debtors by $ 10,000 in balance sheet
b.) Book value of computer system $ 30,000
Less Sale price
Loss on disposal of computer sale $ 5,000
Increase loss on disposal of asset by $ 5,000 in income statement
Decrease assets by $ 30,000 in balance sheet
c.) Dividends on common stock are proposed and the paid. When proposed, they are an accrued expense. When paid the figure crosses out accrued dividends and bank account.
Decrease profit after tax by $ 15,000 in income statement
Decrease cash on bank by $ 15,000 in balance sheet
d.) Accrued taxes once paid crosses out the accrual account against bank account
Decrease profit after tax by $ 11,000 in income statement
Decrease accrued taxes by $ 11,000 and decrease cash on bank by $ 11,000 in balance sheet
3 Calculate tax refund/tax paid for each year.
Year-3-2-10123Taxable Income500600700-2500300500800Tax paid 40%...