Question

The Dawg corporation has Gross Income of $2,150,000 not including Municipal Bond Interest of $60,000, and deductions of $850,000. Calculate Dawg's tax liability.

Answer 1

$273,000

Step-by-step explanation:

The computation of the tax liability is shown below:

= (Gross Income - deductions) × tax rate

= ($2,150,000 - $850,000) × 21%

= $1,300,000 × 21%

= $273,000

We assume that the tax rate for the corporation is 21% and the same is not given in the question

All other information which is given is not relevant. Hence, ignored it