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Mr. Pauper and Mrs. Queen are the equal shareholders in Corporation PQ. Both shareholders have a 37 percent marginal tax rate. PQ's financial records show
Mr. Pauper and Mrs. Queen are the equal shareholders in Corporation PQ. Both shareholders have a 37 percent marginal tax rate. PQ's financial records show the following. $989,000 (413,000) (65,000) Gross income from sales of goods Operating expenses Interest paid on debt to Mr. P and Mrs. Q Dividend distributions (53,000) (53,000) Mrs. Queen TadnpJ a. Compute the combined tax cost for PQ, Mr. Pauper, and Mrs. Queen b. How would your computation change if the interest on the shareholder debt was $171,000 and PQ paid no dividends? Complete this question by entering your answers in the tabs below. Required A Required B Compute the combined tax cost for PQ, Mr. Pauper, and Mrs. Queen. PQ's tax Mr. Pauper and Mrs. Queen's tax on interest Mr. Pauper and Mrs. Queen's tax on dividends Total income tax cost Required B Required A Complete this question by entering your answers in the tabs below. Required A Required B How would your computation change if the interest on the shareholder debt was $171,000 and PQ paid no dividends? PQ's tax Mr. Pauper and Mrs. Queen's tax on interest Required A Required B>
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