Acc501 GDB 1
Solution Fall 2022: Today we share
with you accounting gdb solution before creating your gdb and assignment
solution please read the instructions carefully.
The marginal tax is the amount of additional tax paid on additional Rupee earned as income. This tax is different from the average tax rate which is computed by dividing the total tax paid over the total income earned. Both the tax rates have their own objectives, advantages, and disadvantages. So, adopting the type of tax rate depends upon the objectives and circumstances.
Mr. Ali – a small entrepreneur
computed his tax liability for the tax year 2022 with respect to a taxable
income of 600,000 for the current tax year. He computed his tax liability using
the following tax bracket i. e., 10% up to 400,000; 21% for 400,001 to 500,000;
and 29% for 500,001 to 600,000. However, He is indifferent between the
selection and use of marginal or average tax rate for computing his tax
liability to get more tax benefit.
Required: As a student of business finance, do the following for his help:
Computation of
Total Tax Liability; Average Tax Rate and the Marginal Tax Rate.
b) Suggest which tax rate can
give him more tax benefits.
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