A member of a local CPA firm hands out pamphlets for the local senior center describing changes in the local tax laws. The pamphlets were provided by the local government.a) The contribution is not recorded.b) The contribution is recorded as revenue with an equal amount recorded as expense.c) The contribution is recorded as revenue with an equal amount recorded as "other financing uses."d) The contribution is recorded as an asset with an equal amount recorded as expense.

Let us calculate the total tax this firm has to pay. For the first 50000$, it has to pay 15% of it in taxes. Thus: 50000*15%=7.500$ in taxes. For the next 25000$ (from 50k to 75k) we have a tax rate of 25%. Hence, the tax on this sum is 25000*25%=6.250$ . For the next 25000$ (from 75k to 100k), the company has to pay 34% of this income in taxes. Hence the tax for this sum is: 25000*34%=8500$. Finally, for the rest of its income, which is 118.700$ (its income above 100k), it has to pay taxes at a rate of 39%. Hence, the tax is 118.700*39%=46293$. We have then that the total tax that the firm pays is the sum of the quantities we calculated. 7500$+6250$+8500$+46293$=68543$. To calculate the average tax rate of the company, we have to divide the total tax of the firm by the total income (68.543/218700); this yields 0,3134 or 31,34%.