Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

i need help in B can someone please help me! Kristen, the president and sole shareholder of Egret Corporation, has earned a saiary bonus of

i need help in B can someone please help me! image text in transcribed
Kristen, the president and sole shareholder of Egret Corporation, has earned a saiary bonus of $264,500 for the current year. Because of the lower tax rates on qualifying dividends, Kristen is considering substituting a dividend for the bonus. Assume that the tax rotes are 24% for Kristen and 21%6 for Egret Corporation. Round your answers to nearest dollar, if required. a. How much better off would Kristen be If she were paid a dlvidend rather than salary? If Kristen were paid a bonus, she would receive s after taxes, If Kristen receives a dividend rather than salary; she would receive s after taxes. Thus, she would be better off by recelving the Feedtedek Cneck My won b. How much better off would Egret Corporation be if it paid Kristen a salary rather than a dividend? The net after-tax cost of the bonus for Egret Corporation would be s be 5 x. Therefore, Egret would be better off by $ and the net after-tax cost for the dividend would x if it paid the Fewhack P Cleck Mr Wor c. Assume Egret Corporation paid Kristen a salary bonus of $343,850 instead of a $264,500 dividend. If Egret Corporation were to pay Kristen a salary bonus of $343,850 instead of a 5264,500 dividend, Kristen would receive I after taxes. The bonus would cost Eigret Corporation $ ( after taxes

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles Of Auditing And Other Assurance Services

Authors: Ray Whittington, Kurt Pany

13th Edition

007232726X, 9780072327267

More Books

Students also viewed these Accounting questions

Question

How appropriate would it be to conduct additional research?

Answered: 1 week ago

Question

Who are credible sources and opinion leaders for this public?

Answered: 1 week ago

Question

How does or how might your organization affect this public?

Answered: 1 week ago