The estimated taxable income for Shebill Corporation on January 1,2011,was $80,000,$100,000,$100,000,and $120,000,respectively,for each of the four quarters of 2011.Shebill's estimated annual effective tax rate was 30%.During the second quarter of 2011,the estimated annual effective tax rate was increased to 34%.Given only this information,Shebill's second quarter income tax expense was
A)$30,000.
B)$34,000.
C)$37,200.
D)$61,200.

Question

Quizplus · Accepted Answer

To calculate Shebill's income tax expense for the second quarter, we need to determine the taxable income for the first and second quarters separately, as the effective tax rate changed during the second quarter.

For the first quarter: 
Taxable income = $80,000 
Tax expense = $80,000 x 30% = $24,000

For the second quarter: 
Taxable income = $100,000 
Tax expense = $100,000 x 34% = $34,000

Therefore, the total income tax expense for the first half of the year is: 
$24,000 + $34,000 = $58,000

Since the estimated effective tax rate for the second half of the year is not given, we cannot calculate the total income tax expense for the year.

The Estimated Taxable Income for Shebill Corporation on January 1,2011,was