Ray is starting a new business and trying to decide between a C corporation, S corporation, and partnership. Which of the following statements regarding his decision is correct?
A) An S corporation owner must pay income taxes only on the salary received.
B) A partner in a partnership is taxed on his or her share of partnership income.
C) A shareholder in a C corporation is taxed on his or her share of corporate income.
D) S corporations pay taxes on their current year income.
B) A partner in a partnership is taxed on his or her share of partnership income.
The partnership form is a flow-through entity.
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Breezy Company is disposing of equipment that was originally purchased for $310,000 and has $121,000 of accumulated depreciation to date. The same equipment would cost $430,000 to replace. What is the total amount of sunk cost in this decision?
A. $121,000 B. $189,000 C. $430,000 D. $310,000
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