Darnel Owns 10% of the Stock in Allison Company

question 108

Multiple Choice

Darnel owns 10% of the stock in Allison Company. During the current year, Allison has operating income of $200,000 and distributes $80,000 to its owners.
I.If Allison is a corporation, Darnel has $8,000 of income from Allison.
II.If Allison is a partnership, Darnel has $20,000 of income from Allison.
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• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.