Blue, Inc., records taxable income before salary payments of $700,000 to its president who has a marginal rate of
32%.
a. Calculate the tax liability to Blue if the president's salary is $400,000 and if it is $100,000.
b. What tax benefit is there of paying the higher salary to the president?
c. What negative tax result may occur associated with the payment of the higher salary?

Question

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The Answer of Blue, Inc., records taxable income before salary payments of $700,000 to its president who has a marginal rate of
32%.
a. Calculate the tax liability to Blue if the president's salary is $400,000 and if it is $100,000.
b. What tax benefit is there of paying the higher salary to the president?
c. What negative tax result may occur associated with the payment of the higher salary?

Blue, Inc, Records Taxable Income Before Salary Payments of $700,000 to to Its