The following information is given:
income before interest and tax $20,000
debt capital $100,000
interest on debt capital 5%
tax rate 30%
what is the amount of tax paid for the year?
the amount of tax paid for the year is $ [blank]

The amount of tax paid for the year is $4,500

Explanation:

Income before interest and tax $20,000

Interest Earn (Paid)                       $5,000

Pre-tax profit                                $15,000

Tax                                                $4,500

Profit                                             $10,500

urban company reports the following information regarding its production cost: units produced 37,000 units direct labor $ 30 per unit direct materials $ 35 per unit variable overhead $ 237,000 in total fixed overhead $ 127,000 in total