Norma Formed Hyacinth Enterprises,a Proprietorship,in the Current Year

question 4

Multiple Choice

Norma formed Hyacinth Enterprises,a proprietorship,in the current year.During the 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 withdrew $75,000 from Hyacinth during the year.Assuming Norma has no other capital gains or losses,and ignoring any self-employment taxes,how does this information affect her adjusted gross income for the year?

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

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Definitions:

Middle-Class Values

A set of social and cultural beliefs often associated with the middle class, such as the importance of education, hard work, responsibility, and the pursuit of happiness.

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Fundamental beliefs or goals that an individual strives to achieve over a lifetime.

Affiliation Needs

Occur in people who want to be accepted and liked by others.

Ambition

A strong desire to achieve success, power, or fame, often driving individuals to pursue goals with determination.