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Net Income
The corporation had revenues of 220,000 in its first year of operation. The corp. hasn't collected on 18,700 of its sales and still owes 26,800 on 90,000 of merchandise it purchased. The corp had no inventory on hand at end of the year. The corp pair 11,000 on salaries. Owners invested 25,000 in the business and 25,000 was borrowed on a 5 year note. The corp paid 3,100 in interest that was the amount owed for the year, and paid 8,000 for a 2 year insurance policy on the first day of business. The corp has an effective income tax rate of 11%.
I am having a hard time calculating the tax rate? Is it Revenues minus COGS then you calculate the tax rate? Please help Thanks! |
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