Answer:
a) $5, 764,000
b) $1, 959,000
Explanation:
The first part of the question is to determine the taxable income of the company
The taxable income - The company's gross income - The Capital Expenditures - The Depreciation expenses for capital expenditure
= $8,500,000 - $2,280,000 - $456,000
= $5,764,000
Part B) This is to determine the Federal Income Taxes for the year
Looking at the income tax distribution tab, we first check where the company falls into
Since, the company has a taxable income of $5,764,000, it falls in the category of
$335,000 to $10,000,000= $113,900 + 34% of the amount over $335,000
As such, the Federal Income Tax
= $113,900 + ($5,764,000- $335,000) x 34%
= $113,900 + $1, 845,000
= $1, 959,000
