If a Corporation Makes $100,000 in Profit, How Will That

question 59

Multiple Choice

If a corporation makes $100,000 in profit, how will that profit be taxed if the money is all distributed to the owners?

• A) $100,000 will be taxed at the individual tax rate of each owner.
• B) $100,000 will be taxed at the corporate rate only.
• C) $100,000 will be taxed at the corporate rate; then those after-tax profits will be taxed again as dividends when distributed to each owner.
• D) $100,000 will be taxed at the corporate rate; then those after-tax profits will be taxed again at the corporate rate when distributed to each owner.

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Definitions:

Trial Balance

A bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit account column totals that are equal.