During the 2013 financial year, Stacey Stationeries reported taxable earnings of $78,000. Use Table 2.1 to answer the following questions:

a. How much tax should Stacey Stationeries have paid for the 2013 financial year?
b. Calculate Stacey Stationeries’ average tax rate for the 2013 financial year.
c. What is Stacey Stationeries’ marginal tax rate for the 2013 financial year?
d. If Stacey Stationeries is a small company, how much profit will Stacey have available to distribute to its few stockholders according to the 2013 income statement?

Transcribed Image Text:

TABLE 2.1 > Corporate Tax Rate Schedule Range of taxable income S 0 to $ 50,000 $ 75,000 100,000 100,000 to 335,000 335,000 to 10,000,000 10,000,000 to 15,000,000 15,000,000 to 18,333,333 50,000 to 75,000 to Base tax Over 18,333,333 Tax calculation + (Marginal rate x amount over base bracket) 0 + (15% + (25) 7,500 13,750 + (34 22,250 + (39 113,900 + (34 3,400,000 + (35) 5,150,000 + (38) 6,416,667 + (35) X amount over $ x amount over amount over amount over amount over X X X X X amount over amount over amount over (0) 50,000) 75,000) 100,000) 335,000) 10,000,000) 15,000,000) 18,333,333)