Nancy Smith Is the Sole Shareholder and Employee of White

question 34

Multiple Choice

Nancy Smith is the sole shareholder and employee of White Corporation,a C corporation that is engaged exclusively in accounting services.During the current year,White has operating income of $320,000 and operating expenses (excluding salary) of $150,000.Further,White Corporation pays Nancy a salary of $100,000.The salary is reasonable in amount and Nancy is in the 33% marginal tax bracket irrespective of any income from White.Assuming that White Corporation distributes all after-tax income as dividends,how much total combined income tax do White and Nancy pay in the current year? (Ignore any employment tax considerations.)

• A)$56,125
• B)$64,325
• C)$67,625
• D)$84,000
• E)None of the above

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Definitions:

Priming

is a psychological phenomenon where exposure to one stimulus influences the response to a subsequent stimulus, without conscious guidance or intention.

Explicit Memory

Explicit memory involves conscious recollection of previous experiences or information, such as facts and events.

Semantic Memories

A form of enduring memory that deals with the ability to remember words, ideas, or digits, crucial for language comprehension and application.

Episodic Memories

Memories of specific events or episodes in one's life, including the contextual details of when and where they occurred.