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For the short period January 1 through May 31, 2017, what is Gaffey Corporation's annualized short period income?

What is Gaffey Corporation's tax for the short period?

1 Answer

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Final answer:

Assuming their income for the 5 months is $50,000, the annualized income would be $120,000. The tax for the short period cannot be calculated without the relevant tax rates and laws.

Step-by-step explanation:

To calculate the annualized short period income for Gaffey Corporation for the period from January 1 through May 31, 2017, we need to take the actual income earned during this 5-month period and extrapolate it to reflect what the income would be for a full year. This calculation assumes that the business would continue to earn income at the same rate throughout the entire year. The formula to annualize the income is:

Annualized Income = (Short Period Income × 12) / Number of Months in Short Period

Let's say the short period income for Gaffey Corporation from January 1 to May 31 is $50,000. To annualize this income:

Annualized Income = ($50,000 × 12) / 5

Annualized Income = $600,000 / 5

Annualized Income = $120,000

As for calculating the tax for the short period, we would need the applicable tax rates and laws to determine the correct amount of tax Gaffey Corporation should pay on its income for that period. Without that specific information, we cannot calculate the exact tax amount.

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