G. R. Edwin Inc. had sales of $6.02 million during the past year. The cost of goods sold amounted to $3.06 million. Operating expenses totaled $2.65 million, and interest expense was $27 comma 000. Determine the firm's tax liabilityby using the corporate tax rate structure in the popup window.

Question

Carina Ochoa

Business

18 May, 12:15

G. R. Edwin Inc. had sales of $6.02 million during the past year. The cost of goods sold amounted to $3.06 million. Operating expenses totaled $2.65 million, and interest expense was $27 comma 000. Determine the firm's tax liabilityby using the corporate tax rate structure in the popup window.

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Alexia Hutchinson · Answer 1

Assume: The Federal Alternative Minimum Tax rate of 20%

G. R EDWIN INC $

Sales 6, 020, 000.00

Less:

Cost of goods sold 3, 060,000.00

Gross profit 2,960,000.00

Less:

Operating Expenses 2,650,000.00

Profit 310,000.00

Less: Int Expense 27,000.00

Net Profit 283,000.00

Tax liability assuming tax rate of 20%

= 283,000 * 20%

=$56,600