Principles of Managerial Finance 15th Global Edition by Chad J. Zutter Test bank

Topic:  Ordinary Income
Learning Obj.:  LG 5
Learning Outcome:  F-01
AACSB:  Analytical Thinking
 
39) The marginal tax rate represents the rate at which the next dollar of income is taxed.
Answer:  TRUE
Diff: 1
Topic:  Ordinary Income
Learning Obj.:  LG 5
Learning Outcome:  F-01
AACSB:  Analytical Thinking
 

40) All dividend income received by a corporation is exempted from taxation.
Answer:  FALSE
Diff: 1
Topic:  Ordinary Income
Learning Obj.:  LG 4
Learning Outcome:  F-01
AACSB:  Analytical Thinking
 
41) The tax liability of a sole proprietorship with ordinary income of $105,000 is closest to ________.
 
                         Range of taxable income                       Marginal rate
 
                 $               0      to     $      9,525                               10%
                             9,525    to             38,700                               12
                          38,700    to             82,500                               22
                           82,500    to          157,500                               24
 
A) $25,200
B) $22,050
C) $32,090
D) $19,490
Answer:  D
Diff: 2
Topic:  Ordinary Income
Learning Obj.:  LG 5
Learning Outcome:  F-01
AACSB:  Analytical Thinking
42) The tax liability of a sole proprietorship with ordinary income of $450,000 is closest to ________.
 
                            Range of taxable income                    Marginal rate
 
                 $               0      to     $         9,525                              10%
                             9,525    to             38,700                              12
                           38,700    to             82,500                              22