Use the Following Tax Table to Answer This Question $\quad$

question 29

Multiple Choice

Use the following tax table to answer this question: $\quad$$\quad$$\text { Taxable Income}$ $\quad$$\text { Tax Rate}$
$\begin{array}{|r|r|c|}\hline \$ 0- & 50,000 & 15 \% \\\hline 50,001- & 75,000 & 25 \\\hline 75,001- & 100,000 & 34 \\\hline 100,001- & 335,000 & 39 \\\hline 335,001- & 10,000,000 & 34 \\\hline\end{array}$ Comfy Inn earned $218,310 in taxable income for the year.How much tax does the company owe?

• A)$86,311.20
• B)$85,140.90
• C)$68,390.90
• D)$69,998.20
• E)$65,240.10

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Definitions:

Capital Account

This account records the investments made by owners or shareholders into a company, along with retained earnings and accumulated other comprehensive income.

Capital Balances

The amount of money that partners or owners have invested in a business, often reflected in the equity section of the balance sheet.

Net Income

Net income is the total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue, representing the actual earnings retained.

Closing the Revenue

The process of transferring the balances from revenue accounts to a permanent equity account at the end of an accounting period.