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Calculate the corporate income tax for Quarter 1. Use a corporate income tax rate of [tex]$21 \%$[/tex].

\begin{tabular}{|l|r|r|}
\hline
\multicolumn{3}{|c|}{Income Statement} \\
\hline
& Q1 (x1000) & Q2 (x1000) \\
\hline
Net Sales & 200 & 235 \\
\hline
COGS & [tex]$(70)$[/tex] & [tex]$(85)$[/tex] \\
\hline
Gross Profit & 130 & 150 \\
\hline
Overhead & [tex]$(40)$[/tex] & [tex]$(50)$[/tex] \\
\hline
Pre-tax Income & 90 & 100 \\
\hline
\end{tabular}

Corporate Income Tax = [tex]$[?]$[/tex]



Answer :

GinnyAnswer
To calculate the corporate income tax for Quarter 1, we start with the pre-tax income provided in the income statement and apply the corporate income tax rate to it.

Here are the detailed steps:

1. From the income statement, identify the pre-tax income for Quarter 1 (Q1). According to the table, the pre-tax income for Q1 is \(90 \times 1000 = \$90,000\).

2. The corporate income tax rate provided is \(21\%\).

3. To find the corporate income tax for Q1, multiply the pre-tax income by the tax rate:
[tex]\[ \text{Corporate Income Tax for Q1} = \text{Pre-tax Income for Q1} \times \text{Tax Rate} \][/tex]
Substituting the values, we get:
[tex]\[ \text{Corporate Income Tax for Q1} = 90,000 \times 0.21 \][/tex]

4. Perform the multiplication:
[tex]\[ 90,000 \times 0.21 = 18,900 \][/tex]

Therefore, the corporate income tax for Quarter 1 is [tex]\(\$18,900\)[/tex].

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