Ms. Xie, who is in the 37 percent tax bracket, is the sole shareholder and president...
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Ms. Xie, who is in the 37 percent tax bracket, is the sole shareholder and president of Xenon. The corporation's financial records show he following: Gross income from sales of goods Operating expenses Salary paid to Ms. Xie Dividend distributions Required: $ 1,590,000 (930,000) (300,000) (200,000) a. Compute the combined tax cost for Xenon and Ms. Xie. (Ignore payroll tax.) b. How would your computation change if Ms. Xie's salary was $500,000 and Xenon paid no dividends? Ms. Xie, who is in the 37 percent tax bracket, is the sole shareholder and president of Xenon. The corporation's financial records show he following: Gross income from sales of goods Operating expenses Salary paid to Ms. Xie Dividend distributions Required: $ 1,590,000 (930,000) (300,000) (200,000) a. Compute the combined tax cost for Xenon and Ms. Xie. (Ignore payroll tax.) b. How would your computation change if Ms. Xie's salary was $500,000 and Xenon paid no dividends?
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