Nancy Smith Is the Sole Shareholder and Employee of White

question 93

Multiple Choice

Nancy Smith is the sole shareholder and employee of White Corporation, a calendar year 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 32% 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) $40,295
• B) $54,995
• C) $63,325
• D) $64,396
• E) None of the above

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Definitions:

Self-evaluation Traps

Psychological or behavioral patterns that hinder an individual's accurate assessment of their own performance, capabilities, or worth.

Objective Feedback

Feedback that is based on observable, measurable outcomes and facts, reducing personal biases and opinions in evaluation.

Johari Window

A model that describes the process of giving and receiving feedback to help improve understanding between individuals within a group.

Strengths

Qualities that an individual possesses which are beneficial and advantageous for performance in various tasks or situations.