Barnum and Bailey Incorporated Their Circus This Year and Elected

Multiple Choice

Barnum and Bailey incorporated their circus this year and elected to be treated as an S corporation.Barnum owns 60% of the corporation's stock while Bailey owns the remaining 40%.This year, the corporation had net income of $300,000 before the owners took any money out of the business (e.g., before salaries, dividend distributions, etc.) .Assuming the corporation paid Barnum a deductible salary of $100,000 for managing the business and made dividend distributions of $12,000 to Barnum and $8,000 to Bailey, what is the amount of taxable income to be reported by Barnum?

A) $220,000
B) $192,000
C) $180,000
D) $108,000
E) None of the above