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HippCo and HoppCo operate in the same industry and report the following tax reconciliations in their tax footnotes.    

 

Calculate the amount for each line item assuming a book income of 1,000,000 for each HippCo and HoppCo respectively.

Also Compare and Contrast the effective tax rates of these two companies.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HippCo

 

HoppCo

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hypothetical tax at US rate

 

 

35.00%

 

35.00%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

State and Local taxes

 

 

2.7

 

3.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign income taxed at less than US rate

 

-12.5

 

-7.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax Court Settlement on disputed tax issue

 

6

 

0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effective Tax Rate

 

 

 

31.2%

 

31.1%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HippCo and HoppCo operate in the same industry and report the following tax reconciliations in their tax footnotes.    

 

Calculate the amount for each line item assuming a book income of 1,000,000 for each HippCo and HoppCo respectively.

Also Compare and Contrast the effective tax rates of these two companies.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HippCo

 

HoppCo

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hypothetical tax at US rate

 

 

35.00%

 

35.00%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

State and Local taxes

 

 

2.7

 

3.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign income taxed at less than US rate

 

-12.5

 

-7.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax Court Settlement on disputed tax issue

 

6

 

0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effective Tax Rate

 

 

 

31.2%

 

31.1%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                         

 

Solved
Taxation 2 Weeks Ago
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