Ms. Xie, who is in the 37 percent tax bracket, is the sole shareholder and president of Xenon. The corporation's financial records show the following: Gross income from sales of goods Operating expenses $1,590,000 (930,000) (300,000) (200,000) Salary paid to Ms. Xie Dividend distributions 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? Answer is not complete. Complete this question by entering your answers in the tabs below. Required A Required B Compute the combined tax cost for Xenon and Ms. Xie. (Ignore payroll tax.) Xenon's tax 360,000 X Ms. Xie's tax on salary 111.000 ✓ Ms. Xie's tax on dividend 40.000 ✓ Total income tax cost $ 511,000
Ms. Xie, who is in the 37 percent tax bracket, is the sole shareholder and president of Xenon. The corporation's financial records show the following: Gross income from sales of goods Operating expenses $1,590,000 (930,000) (300,000) (200,000) Salary paid to Ms. Xie Dividend distributions 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? Answer is not complete. Complete this question by entering your answers in the tabs below. Required A Required B Compute the combined tax cost for Xenon and Ms. Xie. (Ignore payroll tax.) Xenon's tax 360,000 X Ms. Xie's tax on salary 111.000 ✓ Ms. Xie's tax on dividend 40.000 ✓ Total income tax cost $ 511,000
Chapter20: Corporations And Parterships
Section: Chapter Questions
Problem 49P
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Transcribed Image Text:Ms. Xie, who is in the 37 percent tax bracket, is the sole shareholder and president of Xenon. The corporation's financial records show
the following:
Gross income from sales of goods
Operating expenses
$1,590,000
(930,000)
(300,000)
(200,000)
Salary paid to Ms. Xie
Dividend distributions
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?
Answer is not complete.
Complete this question by entering your answers in the tabs below.
Required A
Required B
Compute the combined tax cost for Xenon and Ms. Xie. (Ignore payroll tax.)
Xenon's tax
$
360,000 X
Ms. Xie's tax on salary
111.000✔
Ms. Xie's tax on dividend
40.000 ✓
Total income tax cost
511,000
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