Owen and Jessica Own and Operate an S Corporation

question 88

Multiple Choice

Owen and Jessica own and operate an S corporation.Each is a 50% owner.The business reports the following results: How do Owen and Jessica report these items for tax purposes?

• A) $68,500 income on Schedule E; $16,000 investment expense on Schedule D
• B) $68,500 income on Schedule E; $8,000 investment expense on Schedule A
• C) $137,000 income on Schedule E; $88,000 investment expense on Schedule A
• D) $225,000 income on Schedule E; $16,000 investment expense on Schedule A

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Definitions:

Perfectly Competitive

A market structure characterized by a large number of small firms, identical products, and free entry and exit which leads to firms earning normal profits in the long run.

Monopolist

A single seller in a market, who has significant control over the price and supply of a product.

Price Per Unit

The cost assigned to a single unit of a good or service.

Marginal Revenue

The profit derived from the sale of an additional item of a product or service.