Paula Is the Sole Shareholder of Violet,Inc

question 162

Multiple Choice

Paula is the sole shareholder of Violet,Inc.For 2013,she receives from Violet a salary of $300,000 and dividends of $100,000.Violet's taxable income for 2013 is $500,000.On audit,the IRS treats $100,000 of Paula's salary as unreasonable.Which of the following statements is correct?

• A)Paula's gross income will increase by $100,000 as a result of the IRS adjustment.
• B)Violet's taxable income will not be affected by the IRS adjustment.
• C)Paula's gross income will decrease by $100,000 as a result of the IRS adjustment.
• D)Violet's taxable income will decrease by $100,000 as a result of the IRS adjustment.
• E)None of the above is correct.

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Definitions:

Marketing Mix

A combination of factors that can be controlled by a company to influence consumers to purchase its products, typically including product, price, place, and promotion.

Interconnected Nature

The state of being connected with each other, highlighting the relationships and dependencies among elements within a system.

Four Ps

A marketing model that refers to Product, Price, Place, and Promotion - the core elements involved in marketing a product or service.

Marketing Analytics

The practice of using data analysis tools and metrics to measure, manage, and analyze marketing performance and improve effectiveness.