What is the formula for determining income tax expense?

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Multiple Choice

What is the formula for determining income tax expense?

Explanation:
Income tax expense is found by applying the tax rate to the amount of income that’s subject to tax. In many basic problems, that income base is represented by gross profit, so the tax expense equals gross profit multiplied by the tax rate. For example, if gross profit is 100,000 and the tax rate is 30%, the tax expense would be 30,000. Dividing by the rate, adding the rate, or subtracting the rate from gross profit wouldn’t yield the amount of tax owed, so only multiplying the base by the rate gives the correct tax expense.

Income tax expense is found by applying the tax rate to the amount of income that’s subject to tax. In many basic problems, that income base is represented by gross profit, so the tax expense equals gross profit multiplied by the tax rate. For example, if gross profit is 100,000 and the tax rate is 30%, the tax expense would be 30,000. Dividing by the rate, adding the rate, or subtracting the rate from gross profit wouldn’t yield the amount of tax owed, so only multiplying the base by the rate gives the correct tax expense.

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