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Flip's Pizzeria Inc. has the following financial items for the current year: Advertising Expenses $35,000 Cost of Goods Sold $400,000 Other Operating Expenses $300,000 Sales $2,735,000 Cost of Equipment purchased during the year (10 year estimate useful life, 0 salvage value) $325,000 Calculate Flip's taxable liability for the current year.

User NotARobot
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Answer:

we must determine the taxable income:

Sales $2,735,000

Cost of Goods Sold $400,000

Advertising Expenses $35,000

Other Operating Expenses $300,000

taxable income = $2,000,000

assuming the current corporate income tax rate (21%), current tax liability = $2,000,000 x 21% = $420,000

Since the question did not include any specific tax rate, I used the current one. But if the complete question includes some other tax rate, just multiply the taxable income by it.

User Itsfarseen
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