Ralph and Lauren Incorporated Their Bagel Business This Year

question 50

Multiple Choice

Ralph and Lauren incorporated their bagel business this year.For tax purposes, the corporation operates as a regular C corporation.For the year, the corporation was profitable, making $300,000 before the owners took any money out of the business.Assuming the corporation paid Ralph a salary of $40,000 and Lauren a salary of $60,000 and also paid each a dividend of $20,000 to each ($40,000 in total) , what is the corporation's taxable income? (Ignore payroll taxes)

• A)$200,000
• B)$300,000
• C)$160,000
• D)$340,000
• E)Some other amount

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