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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?
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