Ms. Xie, who is in the 37 percent tax bracket, is the sole shareholder and president...

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Finance

Ms. Xie, who is in the 37 percent tax bracket, is the soleshareholder and president of Xenon. The corporation’s financialrecords show the following:
Gross income from sales of goods $ 1,590,000
Operating expenses (930,000 )
Salary paid to Ms. Xie (300,000 )
Dividend distributions (200,000 )
Compute the combined tax cost for Xenon and Ms. Xie. (Ignorepayroll tax.)
How would your computation change if Ms. Xie’s salary was$500,000 and Xenon paid no dividends?

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Computation of the combined tax cost for Xenon and Ms Xie Ignore payroll tax Gross income from sales of goods 1590000 Less Operating expenses 930000 Gross Profit 660000 Less Salary paid to Ms Xie See Answer

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Ms. Xie, who is in the 37 percent tax bracket, is the soleshareholder and president of Xenon. The corporation’s financialrecords show the following:Gross income from sales of goods$1,590,000Operating expenses(930,000)Salary paid to Ms. Xie(300,000)Dividend distributions(200,000)Compute the combined tax cost for Xenon and Ms. Xie. (Ignorepayroll tax.)How would your computation change if Ms. Xie’s salary was$500,000 and Xenon paid no dividends?


Gross income from sales of goods	$	1,590,000
Operating expenses		(930,000	)
Salary paid to Ms. Xie		(300,000	)
Dividend distributions		(200,000	)