Frank and Marion, Husband and Wife, File Separate Returns

question 1553

Multiple Choice

Frank and Marion, husband and wife, file separate returns. Frank and Marion live in a common law state. Frank's salary is $42,000 and Marion's salary is $46,000. Marion receives dividend income of $4,000 from stock inherited from her parents. Frank receives interest income of $1,000 from bonds purchased with his salary after marriage. Frank and Marion receive $3,200 dividend income from stock they purchased jointly. Marion's income would be

• A) $51,100.
• B) $50,000.
• C) $50,100.
• D) $51,600.

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Definitions:

Dividends Payable

A liability indicating the amount of dividends that a company has declared to pay out to its shareholders but has not yet paid.

Dividends Declared

profits that a company's board of directors has decided to distribute to shareholders, typically in the form of cash payments or additional shares.

Shareholders' Equity

The residual interest in the assets of a company after deducting liabilities, representing the ownership interest of shareholders.

Total Liabilities

The combined amount of debts and obligations that a company owes at a certain point in time.