Ralph and Lauren Incorporated Their Bagel Business This Year

Multiple Choice

Ralph and Lauren incorporated their bagel business this year.For tax purposes, the corporation operates as a regular C corporation.For the year, the corporation was profitable, making $300,000 before the owners took any money out of the business.Assuming the corporation paid Ralph a salary of $40,000 and Lauren a salary of $60,000 and also paid each a dividend of $20,000 to each ($40,000 in total) , what is the corporation's taxable income? (Ignore payroll taxes)

A) $200,000
B) $300,000
C) $160,000
D) $340,000
E) Some other amount