Mrs. Fuente, who has a 37% marginal tax rate on ordinary income, is the sole shareholder and CEO of Furey Inc. She also holds a $1 million interest-bearing note issued by Furey. The corporation's current-year financial records show the following: Sales revenue$1,879,000 Mrs. Fuente's salary (160,000)Other operating expenses (414,000)Interest paid on Mrs. Fuente's note (60,000)Dividend distributed to Mrs. Fuente (100,000)Compute Mrs. Fuente's tax on her income from Furey. (Ignore payroll taxes in your calculations.)
A. $101,400
B. $91,200
C. $118,400
D. $64,000
Answer: A
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