Answer:
The company is liable to pay a corporate income tax of $52,500
Explanation:
A tax liability is the amount of tax owed by an individual or company to the state. The taxes are used for the running of government. The amount of tax to be paid by different entities usually varies. Corporate income tax is the amount of tax usually assigned to the firm's profits. In United States, the corporate income tax is 21% that was reduced from 35% in 2017. In our case, the amount of corporate income tax that the company that Tony's business can be determined as follows;
Step 1: Express income tax as a function of Profit
The income tax can be expressed using the equation;
I=R×P
where;
I=income tax
R=corporate tax rate
P=profits
This can otherwise also be expressed as;
Income tax=corporate tax rate×profits
In our case;
Income tax (I)=unknown
Corporate tax rate (r)=21%
Company profits=$250,000
replacing;
I=21%×250,000
I=(21/100)×250,000
I=0.21×250,000=52,500
Corporate income tax=$52,500, the business is therefor liable to pay a corporate income tax amount of $52,5000
