The IRS Agent Who Audited the Form 1120 Filed by Alano

question 21

Multiple Choice

The IRS agent who audited the Form 1120 filed by Alano Inc. concluded that $300,000 of the salary that Alano paid to its CEO and sole shareholder was a constructive dividend. As a result:

• A) The CEO/shareholder's taxable income increases by $300,000.
• B) Alano must distribute an additional $300,000 cash to the CEO/shareholder
• C) Alano must distribute an additional $300,000 cash to the CEO/shareholder.
• D) Alano's taxable income increases by $300,000.

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Definitions:

Quantity Demanded

Refers to the total amount of a good or service that consumers are willing and able to purchase at a particular price level in a given time period.

Dollars per Unit

A measure of cost or value expressed in terms of the amount of dollars per individual unit of a good or service.

Competitive Market

A market structure characterized by a large number of buyers and sellers, where no single participant can significantly influence prices.

Build A Bear Shop

A retail company and concept where customers can create, personalize, and purchase their own stuffed animals through an interactive process.