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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 the following: Gross income from sales of goods Operating expenses Salary paid to Ms. Xie Dividend distributions $ 1,590, 000 (930,000 ) (300,000) (200,000) Required: 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? For Requirement A, what is Xenon’s tax? For Requirement B, What is Xenon’s tax?

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 Salary paid to Ms. Xie Dividend distributions $ 1,590, 000 (930,000 ) (300,000) (200,000) Required: 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? For Requirement A, what is Xenon’s tax? For Requirement B, What is Xenon’s tax?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 the following: Gross income from sales of goods Operating expenses Salary paid to Ms. Xie Dividend distributions $ 1,590, 000 (930,000 ) (300,000) (200,000) Required: 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? For Requirement A, what is Xenon’s tax? For Requirement B, What is Xenon’s tax?
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 Salary paid to Ms. Xie Dividend distributions $ 1,590,000 (930,000) (300,000) (200,000) Required: 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? X Answer is not complete. Complete this question by entering your answers in the tabs below. Required A Required B How would your computation change if Ms. Xie's salary was $500,000 and Xenon paid no dividends? Amount Xenon's tax 2$ Ms. Xie's tax on salary 185,000 Total income tax cost 185,000 < Required A Required B
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 Salary paid to Ms. Xie Dividend distributions $ 1,590,000 (930,000) (300,000) (200,000) Required: 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? X Answer is not complete. Complete this question by entering your answers in the tabs below. Required A Required B How would your computation change if Ms. Xie's salary was $500,000 and Xenon paid no dividends? Amount Xenon's tax 2$ Ms. Xie's tax on salary 185,000 Total income tax cost 185,000 < Required A Required B
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: $ 1,590,000 Gross income from sales of goods Operating expenses Salary paid to Ms. Xie Dividend distributions (930,000) (300,000) (200,000) Required: 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? X 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.) Amount Xenon's tax $ Ms. Xie's tax on salary 111,000 O Ms. Xie's tax on dividend 40,000 O Total income tax cost $ 151,000 < Required A Required B >
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: $ 1,590,000 Gross income from sales of goods Operating expenses Salary paid to Ms. Xie Dividend distributions (930,000) (300,000) (200,000) Required: 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? X 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.) Amount Xenon's tax $ Ms. Xie's tax on salary 111,000 O Ms. Xie's tax on dividend 40,000 O Total income tax cost $ 151,000 < Required A Required B >
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