1. Shimmer Inc. is a calendar-year-end, accrual method corporation. This year, it sells the following long-term assets:
Asset Sales Price Cost Accumulated Depreciation
Building $692,000 . $685,000 . $39,000
Sparkle Corporation stock 207,000 262,000 n/a
Shimmer does not sell any other assets during the year, and its taxable income before these transactions is $822,000. What are Shimmer's taxable income and tax liability for the year? Use Corporate Tax Rate Table.
Taxable Income
Tax Liability
Please explain how to use the table.
2. Lily Tucker (single) owns and operates a bike shop as a sole proprietorship. This year, she sells the following long-term assets used in her business:
| Asset |
Sales Price |
Cost |
Accumulated Depreciation |
| Building |
$271,800 |
$228,000 |
$66,000 |
| Equipment |
$101,000 |
$180,800 |
$26,600 |
|
Lily's taxable income before these transactions is $200,000
What are Lily's taxable income and tax liability for the year? Use Tax Rate Schedule for reference.
Taxable Income $---------
Tax Liability . $--------