Question: Need help with B & C Problem 19-48 (LO.4) Kristen, the president and sole shareholder of Egret Corporation, has earned a salary bonus of $30,000

Need help with B & C Need help with B & C Problem 19-48 (LO.4) Kristen, the president

Problem 19-48 (LO.4) Kristen, the president and sole shareholder of Egret Corporation, has earned a salary bonus of $30,000 for the current year. Because of the lower tax rates on qualifying dividends, Kristen is considering substituting a dividend for the bonus. Assume that the tax rates are 24% for Kristen and 21% for Egret Corporation. a. How much better off would Kristen be if she were paid a dividend rather than salary? If Kristen were paid a bonus, she would receive $ 22,800 after taxes. If Kristen receives a dividend rather than salary, she would receive $ 25,500 after taxes. Thus, she would be better off by receiving the dividend Feedback b. How much better off would Egret Corporation be if it paid Kristen a salary rather than a dividend? The net after-tax cost of the bonus for Egret Corporation would be $ be $ 6,300 x . Therefore, Egret would be better off by $ 23,700 6,300 and the net after-tax cost for the dividend would if it paid the bonus Feedback C. Assume Egret Corporation paid Kristen a salary bonus of $35,000 instead of a $30,000 dividend. If Egret Corporation were to pay Kristen a salary bonus of $35,000 instead of a $30,000 dividend, Kristen would receive 26,600 V after taxes. The bonus would cost Egret Corporation $ 8,400 X after taxes

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