Explanation: Owners of Unincorporated Entities Can Be Either Individuals or Corporations.In

question 1

Multiple Choice

Explanation: Owners of unincorporated entities can be either individuals or corporations.In either case, the tax year-end of the entity must match the tax year-end of the owner.
Difficulty: 2 Medium
Topic: Entity Tax Characteristics
Learning Objective: 12-03 Identify fundamental differences in tax characteristics across entity types.
Bloom's: Remember
Accessibility: Keyboard Navigation; Screen Reader Compatible
AICPA/AACSB: BB Critical Thinking / Reflective Thinking
-Roberto and Reagan are both 25-percent owner/managers for Bright Light Inc.Roberto runs the retail store in Sacramento, CA, and Reagan runs the retail store in San Francisco, CA.Bright Light Inc.generated a $125,000 profit companywide made up of a $75,000 profit from the Sacramento store, a ($25,000) loss from the San Francisco store, and a combined $75,000 profit from the remaining stores.If Bright Light Inc.is an S corporation, how much income will be allocated to Roberto?

• A)$31,250
• B)$62,500
• C)$75,000
• D)$125,000

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Definitions:

Parol Evidence

The rule that bars oral testimony or prior written agreements that contradict or modify the terms of a written contract.

Integrated Document

A combined document that merges several related materials into one cohesive file, often for clarity and comprehensive understanding.

Ambiguous

Lacking clear definition or form, often leading to confusion or multiple interpretations.

Parol Evidence Rule

is a principle in contract law that prevents parties from presenting extrinsic evidence of conversations, agreements, or documents to alter or contradict the terms of a written contract.