Question

Alpha Associates was organized on January 1, Year 1. Alpha was organized as a partnership. Alpha reported $200,000 of before tax income during Year 1 and the partners withdrew $30,000 from the company. Assuming a corporate income tax rate of 30% and a personal income tax rate of 15%, the total amount of tax collected by the government is __________.

Answer 1

Answer:

correct answer is $30,000

Explanation:

given data

Alpha reported =  $200,000

withdrew = $30,000

corporate income tax rate = 30%

personal income tax rate = 15%

solution

we get here total amount of tax collect as

total amount of tax collect = Alpha reported amount × personal income tax rate  ...............1

put here value

total amount of tax collect = $200,000 × 15%

total amount of tax collect = $30,000

here no corporate  tax required  and partner is taxed on share of total partnership income regardless of amount withdrawn

so correct answer is $30,000