Question: Please help me solve these questions Problem 19-48 (Algorithmic) (LO. 4) Kristen, the president and sole shareholder of Egret Corporation, has earned a salary bonus
Please help me solve these questions
Problem 19-48 (Algorithmic) (LO. 4) Kristen, the president and sole shareholder of Egret Corporation, has earned a salary bonus of $212,500 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. Round your answers to nearest dollar, if required. 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 $ 161,500 after taxes. If Kristen receives a dividend 180,625 after taxes. Thus, she would be better off by receiving rather than salary, she would receive $ the dividend b. How much better off would Egret Corporation be if it paid Kristen a salary rather than a dividend? 167,875 and the net after-tax The net after-tax cost of the bonus for Egret Corporation would be $ cost for the dividend would be 0. Therefore, Egret would be better off by $ if it paid the bonus c. Assume Egret Corporation pays Kristen a salary bonus of $276,250 instead of a $212,500 dividend. If Egret Corporation were to pay Kristen a salary bonus of $276,250 instead of a $212,500 dividend, Kristen would receive $ 209,950 after taxes. The bonus would cost Egret Corporation $ 218,238 after taxes. d. What should kristen do? Both Egret Corporation and Kristen are better off with the $276,250 bonus
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