Atomic Corporation Is Enjoying a Very Profitable Year

question 82

Multiple Choice

Atomic Corporation is enjoying a very profitable year.The board of directors is considering paying either a bonus to the president of the corporation or an extra dividend to the shareholder.Shinil is both the president and the 100% shareholder.Which of the following statements is generally correct with respect to closely held corporations in Atomic's position?

• A)For tax purposes,the corporation will prefer to pay the bonus.
• B)For tax purposes,the corporation will prefer to pay the dividend.
• C)The owner-manager will only be taxed on the bonus,not the dividend.
• D)The corporation's taxable income will be impacted in the same manner by both the bonus and the dividend payments.

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Definitions:

Market Share

A company's portion of sales within the entire market it operates in, measured by the percentage of total industry sales the company secures.

Charismatic Leader

A leadership style characterized by an individual's ability to inspire and motivate people through their personal charm and conviction.

Initial Business Success

The early stage achievement of desired business goals, such as profitability, market share expansion, or company growth metrics.

Achievement Drive

A personal motivation to set and attain challenging goals, often characterized by determination and perseverance to achieve a high standard of success.