A limited company has a taxable profit of €68,400. Tax is charged at a rate of 12.5%. (i) Calculate the amount of tax to be paid: (Show your workings.) Answer: € __________ (ii) Fill in the missing word in the following sentence: The tax paid on profits of a limited company is called __________ tax.

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A limited company has a taxable profit of €68,400 - Leaving Cert Business - Question 9 - 2006

Question 9

A limited company has a taxable profit of €68,400. Tax is charged at a rate of 12.5%. (i) Calculate the amount of tax to be paid: (Show your workings.) Answer: € _... show full transcript

Worked Solution & Example Answer:A limited company has a taxable profit of €68,400 - Leaving Cert Business - Question 9 - 2006

Step 1

Calculate the amount of tax to be paid:

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Answer

To calculate the amount of tax to be paid, you can use the formula:

ext{Tax} = rac{ ext{Profit} imes ext{Rate}}{100}

For this case:

Profit = €68,400
Rate = 12.5%

Substituting the values into the formula gives:

ext{Tax} = rac{68,400 imes 12.5}{100} = 8,550

Therefore, the tax to be paid is €8,550.

Step 2

Fill in the missing word in the following sentence:

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Answer

The tax paid on profits of a limited company is called Corporation Tax.

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