Flycatcher Corporation,a C Corporation,has Two Equal Individual Shareholders,Nancy and Pasqual

question 33

Multiple Choice

Flycatcher Corporation,a C corporation,has two equal individual shareholders,Nancy and Pasqual.In the current year,Flycatcher earned $100,000 net profit and paid a dividend of $10,000 to each shareholder.Regardless of any tax consequences resulting from their interests in Flycatcher,Nancy is in the 33% marginal tax bracket and Pasqual is in the 15% marginal tax bracket.With respect to the current year,which of the following statements is incorrect?

• A)Flycatcher cannot avoid the corporate tax altogether by distributing all $100,000 of net profit as dividends to the shareholders.
• B)Nancy incurs income tax of $1,500 on her dividend income.
• C)Pasqual incurs income tax of $1,500 on his dividend income.
• D)Flycatcher pays corporate tax of $22,250.
• E)None of the above.

Analyze the appropriateness of piecework under frequent technological changes.

Identify the impact of internal politics on merit pay distribution.

Understand the basis of payment under standard hour plans.

Recognize the importance of managerial willingness in the success of incentive plans.

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Definitions:

Enforceable Oral

Pertaining to oral agreements that are legally binding and can be enforced in a court of law, depending on the nature of the agreement and the jurisdiction.

Renovated

Renovation refers to the process of restoring or improving a structure, often bringing new life and functionality to an old or damaged building.

Deposit

A sum of money placed in trust or paid as an initial part-payment in a purchasing process to secure an agreement.

Uniform Electronics Transactions Act

Legislation that provides legal framework and recognition for electronic signatures and records in commerce.