Thornton, inc., had taxable income of $127,682 for the year. The company's marginal tax rate was 34% and its average tax rate wa

Question

Aleonysh [2.5K]

3 years ago

15

Thornton, inc., had taxable income of $127,682 for the year. The company's marginal tax rate was 34% and its average tax rate wa

s 23.7%. Tow much did the company have to pay in taxes for the year?
a. $28,883.
b. $29,227.
c. $27,525.
d. $30,471.

Business

1 answer:

enot [183] · Answer 1 · 2022-08-31T06:20:15+03:00

Answer:

Are you sure you copied the options correctly?

When you do the math, $127,682 x 0.237 = $30,261

the closest option is d. $30,471.

average tax rate = $30,471 / $127,682 = 23.86%,

Explanation:

the company's total tax liability = total taxable income x average tax rate

total amount of taxes paid = $127,682 x 23.7% = $30,260.63 ≈ $30,261

The formula used to calculate average tax rate = total taxes paid / total taxable revenue. To determine total taxes paid you just need to adjust this formula.