newnansm12 - Chapter 12: After-Tax Cash Flows 12-1 (a)...

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Unformatted text preview: Chapter 12: After-Tax Cash Flows 12-1 (a) Federal Taxes On the first $35,000 16% $5,600.00 From $35,000 to $70,000 22% $5,940.00 $11,540.00 Taxable income $62,000 Federal taxes=$11,540 Non-refundable tax credit=$8,000 16%= $1,280.00 Federal taxes payable= $10,260.00 (b) Increase in federal taxes after increase of $16,000 On the first $35,000 16% $5,600.00 From $35,000 to $70,000 22% $7,700.00 From $70,001 to $113,804 26% $2,079.74 $13,300.00 Taxable income $78,000 Federal taxes=$15,380 Non-refundable tax credit=$8,000 16%= $1,280.00 Federal taxes payable= $14,100.00 Increase in federal taxes= $3,840.00 12-2 (a) Alberta resident Federal Taxes On the first $35,000 16% $5,600.00 From $35,000 to $70,000 22% $2,200.00 $7,800.00 Taxable income $62,000 Federal taxes=$7,800 Non-refundable tax credit=$6,000 16%= $960.00 Federal taxes payable= $6,840.00 Provincial taxes: Taxable income=$45,000 Non-refundable tax credit=$6,000 On all income 10% $4,500.00 Total taxes= $11,340.00 (b) Ontario resident Federal taxes payable=$6,840 Provincial taxes: On the first $33,375 6.05% $2,019.19 From $33,375 to $66,752 9.15% $1,063.69 $3,082.88 Total taxes= $9,922.88 12-3 Problem 12.3 Federal Taxes: On the first $35,000 16% $1,248.00 $1,248.00 Non-refundable tax credit=$6,000 16% $960.00 Federal taxes payable= $288.00 Provincial taxes: On the first $30,544 10.90% $850.20 $850.20 Total taxes= $1,138.20 Net Income=$7,800-$1,138.2= $6,661.80 Upon increase in income of $2,600 (gross income=$7,800+$2,600=$10,400) Federal Taxes: On the first $35,000 16% $1,664.00 $1,664.00 Non-refundable tax credit=$6,000 16% $960.00 Federal taxes payable= $704.00 Provincial taxes: On the first $30,544 10.90% $1,133.60 $1,133.60 Total taxes= $1,837.60 Net Income=$7,800+$2,600-$1,837.60 $8,562.40 Increase in net income=$8,562.40-$6,661.80 $1,900.60 12-4 Federal Taxes: On the first $35,000 16% $1,248.00 $1,248.00 Non-refundable tax credit=$6,000 16%= $960.00 Federal taxes payable= $288.00 Provincial taxes: On all income 10.00% $780.00 $780.00 Total taxes= $1,068.00 Net Income=$7,800 $1,068.2= $6,732.00 Upon increase in income of $2,600 (gross income=$7,800+$2,600=$10,400) Federal Taxes: On the first $35,000 16% $1,664.00 $1,664.00 Non-refundable tax credit=$6,000 16%= $960.00 Federal taxes payable= $704.00 Provincial taxes: On all income 10.00% $1,040.00 $1,040.00 Total taxes= $1,744.00 Net Income=$7,800+$2,600 $1,837.60 $8,656.00 Increase in net income=$8,656.00 $6,732.00 $1,924.00 12-5 PROBLEM 12-5 DATA Taxable Income $ 65,000.00 Non-refundable tax credit $ 8,000.00 Province 2004 Federal Personal rates Amount Total per Level Tax per Level On the first $ 35,000.00 16.00% $ 5,600.00 $ 5,600.00 $5,600.00 from $ 35,000.00 to $ 70,000.00 22.00% $ 7,700.00 $ 13,300.00 $ 6,600.00 from $ 70,001.00 to $ 113,804.00 26.00% $11,388.78 $ 24,688.78 $ - above $ 113,805.00 29.00% $ - $12,200.00 Taxable Income $ 65,000.00 Fed tax = $12,200.00 Fed Avg Tax= 16.80% Non- refundable...
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newnansm12 - Chapter 12: After-Tax Cash Flows 12-1 (a)...

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