Taxable income of Kelly and Co., Inc., -Â Â Â Â
                                                                          $19
million
To calculate tax liability (refer the Corporate Tax Rates
schedule)
$19 million falls into over 18,333,333 tax bracket which has 35%
of tax rate
Therefore the corporate tax = marginal tax rate * taxable
income
= 35% * $19,000,000
= $6,650,000
Therefore Kelly federal income tax Liability is $6,650,000
The company's marginal and average tax rates on taxable income
are
Company’s marginal tax rate is 35%.
Average tax rate = Income tax Liability / Taxable income
Average Tax Rate = $6,650,000/$19,000,000 = 35.00%
Therefore company's marginal and average tax rates both are
35%
