Problem $18-35($LO $18-1)($Algo$)$

Bulldog Corporation reported taxable income of $$800,000$ this year, before any deduction for any payment to its sole

shareholder and employee, Rojas. Bulldog chose to pay a bonus of $$144,000$ to Rojas at year$-$end. The bonus meets the

requirements to be "reasonable" and is therefore deductible by Bulldog. Rojas is subject to a marginal tax rate of $35$

percent on the bonus. What is the income tax imposed on the corporate income earned by Bulldog and the income tax on

the bonus paid to Rojas?

Answer is complete but not entirely correct.