Question

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

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 $ 1,590,000
Operating expenses (930,000 )
Salary paid to Ms. Xie (300,000 )
Dividend distributions (200,000 )
  1. Compute the combined tax cost for Xenon and Ms. Xie. (Ignore payroll tax.)
  2. How would your computation change if Ms. Xie’s salary was $500,000 and Xenon paid no dividends?
Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Ms. Xie, who is in the 37 percent tax bracket, is the sole shareholder and president...
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 $ 1,632,000 Operating expenses (944,000 ) Salary paid to Ms. Xie (314,000 ) Dividend distributions (214,000 ) Compute the combined tax cost for Xenon and Ms. Xie. (Ignore payroll tax.) How would your computation change if Ms. Xie’s salary was $528,000 and Xenon paid no dividends?
Mr. Lion, who is in the 37 percent tax bracket, is the sole shareholder of Toto...
Mr. Lion, who is in the 37 percent tax bracket, is the sole shareholder of Toto Inc., which manufactures greeting cards. Toto’s average annual net profit (before deduction of Mr. Lion’s salary) is $200,000. For each of the following cases, compute the income tax burden on this profit. (Ignore any payroll tax consequences.) a. Mr. Lion’s salary is $100,000, and Toto pays no dividends. b. Mr. Lion’s salary is $100,000, and Toto distributes its after-tax income as a dividend. c....
Mr. Lion, who is in the 37 percent tax bracket, is the sole shareholder of Toto...
Mr. Lion, who is in the 37 percent tax bracket, is the sole shareholder of Toto Inc., which manufactures greeting cards. Toto’s average annual net profit (before deduction of Mr. Lion’s salary) is $430,000. For each of the following cases, compute the income tax burden on this profit. (Ignore any payroll tax consequences.) a. Mr. Lion’s salary is $100,000, and Toto pays no dividends. b. Mr. Lion’s salary is $100,000, and Toto distributes its after-tax income as a dividend. c....
Mr. Lion, who is in the 37 percent tax bracket, is the sole shareholder of Toto...
Mr. Lion, who is in the 37 percent tax bracket, is the sole shareholder of Toto Inc., which manufactures greeting cards. Toto’s average annual net profit (before deduction of Mr. Lion’s salary) is $220,000. For each of the following cases, compute the income tax burden on this profit. (Ignore any payroll tax consequences.) a)Mr. Lion’s salary is $100,000, and Toto pays no dividends. b)Mr. Lion’s salary is $100,000, and Toto distributes its after-tax income as a dividend. c)Toto is an...
Amana Inc. pays its sole shareholder, Carl Lopez, a salary of $200,000. At each year-end, Amana...
Amana Inc. pays its sole shareholder, Carl Lopez, a salary of $200,000. At each year-end, Amana pays Carl a "bonus" equal to the difference between Amana's taxable income for the year (before the bonus) and $75,000. For 2019, Amana reported pre-bonus taxable income of $800,000 and paid Carl a bonus of $725,000. When audited, the IRS determined that individuals working in Carl's position earned on average $300,000 per year. Amana had no formal compensation policy and never paid a dividend....
Mrs. Franklin, who is in the 37 percent tax bracket, owns a residential apartment building that...
Mrs. Franklin, who is in the 37 percent tax bracket, owns a residential apartment building that generates $98,000 annual taxable income. She plans to create a family partnership by giving each of her two children a 20 percent equity interest in the building. (She will retain a 60 percent interest.) Mrs. Franklin will manage the building, and value of her services is $23,000 per year. If Mrs. Franklin’s children are in the 12 percent tax bracket, compute the tax savings...
Note: This problem is for the 2018 tax year. David R. and Ella M. Cole (ages...
Note: This problem is for the 2018 tax year. David R. and Ella M. Cole (ages 39 and 38, respectively) are husband and wife who live at 1820 Elk Avenue, Denver, CO 80202. David is a self-employed consultant specializing in retail management, and Ella is a dental hygienist for a chain of dental clinics. David earned consulting fees of $145,000 in 2018. He maintains his own office and pays for all business expenses. The Coles are adequately covered by the...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT