Norma Formed Hyacinth Enterprises, a Proprietorship, in 2014

question 65

Multiple Choice

Norma formed Hyacinth Enterprises, a proprietorship, in 2014. In its first year, Hyacinth had operating income of $400,000 and operating expenses of $240,000. In addition, Hyacinth had a long-term capital loss of $10,000. Norma, the proprietor of Hyacinth Enterprises, withdrew $75,000 from Hyacinth during the year. Assuming Norma has no other capital gains or losses, how does this information affect her taxable income for 2014?

• A) Increases Norma's taxable income by $157,000 ($160,000 ordinary business income - $3,000 long­term capital loss).
• B) Increases Norma's taxable income by $150,000 ($160,000 ordinary business income - $10,000 long­term capital loss).
• C) Increases Norma's taxable income by $75,000.
• D) Increases Norma's taxable income by $160,000.
• E) None of the above.

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Definitions:

Characteristics

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Social Involvement

Engagement and participation in community or societal activities, contributing to a sense of belonging and social well-being.

Explanatory Style

The manner in which individuals habitually explain the causes of events, which can affect their motivation and emotional states.

Seligman

Martin Seligman is a psychologist known for his work on positive psychology, learned helplessness, and the theories of well-being and optimism.