Answer:
32.83%
Explanation:
Given:
Total sales = $843,800
cost = $609,900
Amount paid in interest = $38,200
Dividends paid = $18,000
Increased in retained earnings = $62,138
Depreciation = $76,400
Now,
the earning before taxes = Total sales - Cost - Interest paid - Depreciation
or
the earning before taxes = $843,800 - $609,900 - $76,400 - $38,200
or
the earning before taxes = $119,300
And,
the net income = Dividends paid + Increased in retained earnings
the net income = $18,000 + 62,138
or
the net income = $80,138
Thus,
the tax paid = earning before taxes - net income = $119,300 - $80,138
or
the tax paid = $39,162
Hence,
the tax rate = [tex]\frac{\textup{Tax paid}}{\textup{Earnings before tax}}\times100[/tex]
or
the tax rate = [tex]\frac{39,162}{119,300}\times100[/tex]
or
The tax rate = 32.83%
