Firefly Corporation Is a C Corporation

question 12

Multiple Choice

Firefly Corporation is a C corporation.Freya owns all of the stock.During the current year Firefly earned taxable income of $500,000 and paid a $300,000 dividend to Freya.Which of the following statements is correct?

• A)Firefly will pay corporate income tax on its earnings,and Freya will paid individual income tax on the dividends.
• B)Only Firefly will pay taxes.Freya will not pay any taxes due to her holdings in Firefly.
• C)Firefly's income will flow through to Freya's tax return,and she will pay the taxes on the $500,000 of corporate income.
• D)Firefly will not pay any taxes,but Freya will pay taxes on the dividend received.

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Definitions:

Transcendence

A state of being or existence above and beyond the limits of material experience, often associated with spiritual or philosophical contexts.

Culture Shock

The feeling of disorientation experienced by someone when they are suddenly subjected to an unfamiliar culture, way of life, or set of attitudes.

Cultural Taboo

Practices, behaviors, or discussions that are prohibited or restricted by societal norms and values within a specific culture.

Cultural Perspective

A viewpoint that acknowledges how an individual’s beliefs, values, and practices are shaped by their culture, and how this influences their understanding of the world.