Steve Has Opened a Sole Proprietorship Bicycle Shop

Multiple Choice

Steve has opened a sole proprietorship bicycle shop. The business shows a net income of $100,000. Steve took a salary of $40,000. The remaining money is left in the bank.

A) At tax time, the business pays taxes on $100,000, and Steve pays taxes on $40,000.
B) At tax time, the business pays taxes on $140,000.
C) At tax time, Steve pays taxes on $140,000.
D) At tax time, the business pays taxes on $70,000, and Steve pays taxes on $70,000.