Nettle Corporation is preparing its first quarterly interim report.It is subject to a corporate income tax rate of 20% on the first $50,000 of taxable income and 35% on taxable income above $50,000.Its estimated pretax accounting income for 2011, by quarter, is:
Nettle expects to earn and receive operating income for the year and does not contemplate any changes in accounting procedures or principles that would affect its pretax accounting income.
Required:
1.Determine Nettle's estimated effective tax rate for 2011.
2.Prepare a schedule to show Nettle's estimated net income for each quarter of 2011.

Question

Nettle Corporation is preparing its first quarterly interim report.It is subject to a corporate income tax rate of 20% on the first $50,000 of taxable income and 35% on taxable income above $50,000.Its estimated pretax accounting income for 2011, by quarter, is:
  Nettle expects to earn and receive operating income for the year and does not contemplate any changes in accounting procedures or principles that would affect its pretax accounting income.
Required:
1.Determine Nettle's estimated effective tax rate for 2011.
2.Prepare a schedule to show Nettle's estimated net income for each quarter of 2011.

Quizplus · Accepted Answer

The Answer of Nettle Corporation is preparing its first quarterly interim report.It is subject to a corporate income tax rate of 20% on the first $50,000 of taxable income and 35% on taxable income above $50,000.Its estimated pretax accounting income for 2011, by quarter, is:
  Nettle expects to earn and receive operating income for the year and does not contemplate any changes in accounting procedures or principles that would affect its pretax accounting income.
Required:
1.Determine Nettle's estimated effective tax rate for 2011.
2.Prepare a schedule to show Nettle's estimated net income for each quarter of 2011.

Nettle Corporation Is Preparing Its First Quarterly Interim Report