Harry and Ilene Want to Market a New Line of Kayaks

question 67

Multiple Choice

Harry and Ilene want to market a new line of kayaks and related gear under the brand name Journeys as a corporation-Journeys Inc. To avoid income taxes at the corporate level, they should form​

• A) ​an alien corporation.
• B) ​a close corporation.
• C) ​an S corporation.
• D) ​a private corporation.

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Definitions:

Capital Leases

Leases that are recognized by the lessee as an asset and liability on the balance sheet, based on the assumption that it involves the transfer of ownership over the lease term.

Balance Sheet

A financial statement that reports a company's assets, liabilities, and shareholders' equity at a specific point in time, showing the company's financial position.

Operating Lease

A lease agreement for the use of an asset without ownership transfer.

IFRS

International Financial Reporting Standards, which are a set of accounting standards developed by the International Accounting Standards Board (IASB) that serve as a global framework for financial reporting.