Darnel Owns 10% of the Stock in Allison Company

Multiple Choice

Darnel owns 10% of the stock in Allison Company. During the current year, Allison has operating income of $200,000 and distributes $80,000 to its owners.
I.If Allison is a corporation, Darnel has $8,000 of income from Allison.
II.If Allison is a partnership, Darnel has $20,000 of income from Allison.
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A) Only statement I is correct.
B) Only statement II is correct.
C) Both statements are correct.
D) Neither statement is correct.