Ms. Xie, who is in the 37 percent tax bracket, is the sole shareholder and president of Xenon. The corporations financial records show the following:

Gross income from sales of goods	$	1,605,000
Operating expenses		(935,000	)
Salary paid to Ms. Xie		(305,000	)
Dividend distributions		(205,000	)

Required:

1. Compute the combined tax cost for Xenon and Ms. Xie. (Ignore payroll tax.)
2. How would your computation change if Ms. Xies salary was $510,000 and Xenon paid no dividends?