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Mr. Lion, who is in the 37 percent tax bracket, is the sole shareholder of Toto Inc., which manufactures greeting cards. Toto's average annual net

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Mr. Lion, who is in the 37 percent tax bracket, is the sole shareholder of Toto Inc., which manufactures greeting cards. Toto's average annual net profit (before deduction of Mr. Lion's salary) is $310,000. For each of the following cases, compute the income tax burden on this profit. Assume that all dividends are taxed to individuals at a 20% tax rate. (ignore any payroll tax consequences) Required: a. Mr. Lion's salary is $100,000, and Toto pays no dividends: b. Mr. Lion's salary is $100,000, and Toto distributes its after-tax income as a dividend, c. Toto is an s corporation, Mr. Lion's salary is $100,000, and Toto makes no cash distributions. Assume Toto's ordiny income qualifles for the 20 percent Bl deduction, subject to no limitations d. Toto is an S corporation Me Lion draws no salary, and Toto makes no cash distributions Assume Toto's ordinary income qualified for the 20 percent QB deduction, subject to no limitations e. Toto is an Scorporation. Me. Lion draws no salary, and Toto makes cash distributions of all its income to Me Lion Assume Toto's ordinary income qualifies for the 20 percent Bi deduction, subje tto no limitation Amount a. Income tax burden on this profil b Income tax burden on this profit c. Income tax burden on this profit d Income tax burden on this profit Income tax burden on this profit

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