Oldham, Incorporated conducts business in State M and State N, which both use the UDITPA three-factor formula to apportion income. State Ms corporate tax rate is 4.50 percent, and State Ns corporate tax rate is 7.00 percent. This year, Oldham had the following sales, payroll, and property (in thousands of dollars) in each state:

	State M	State N	Total
Gross receipts from sales	$ 3,600	$ 8,100	$ 11,700
Payroll expense	1,400	1,800	3,200
Property costs	1,500	1,600	3,100

Required:

If Oldhams before-tax income was $3.6 million, compute its State M and State N tax.

Note: Round all apportionment factors to 4 decimal places, e.g., 47.15% would be 0.4715. Enter "Apportionment percentage" and "Tax rate" in decimals and not in percentage. Do not round any intermediate values. Enter your answers in dollars and not in millions or thousands of dollars.

	State M	State N
Total taxable income subject to apportionment
Apportionment percentage
State taxable income
Tax rate
State tax

2.

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	$ 1,593,000
Operating expenses	(931,000)
Salary paid to Ms. Xie	(301,000)
Dividend distributions	(201,000)

Required:

Compute the combined tax cost for Xenon and Ms. Xie. (Ignore payroll tax.)

How would your computation change if Ms. Xies salary was $502,000 and Xenon paid no dividends?