Determine nettle estimated effective tax rate

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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 2018, by quarter, is:

 

1st Quarter

2nd Quarter

3rd Quarter

4th Quarter

2018 Total

Est. Income

$75,000

$165,000

$143,000

$120,000

$503,000

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 2018.

2. Show a schedule to show Nettle's estimated net income for each quarter of 2018.

Reference no: EM132493928

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