Norma Formed Hyacinth Enterprises,a Proprietorship,in 2010

Multiple Choice

Norma formed Hyacinth Enterprises,a proprietorship,in 2010.In its first year,Hyacinth had operating income of $200,000 and operating expenses of $100,000.In addition,Hyacinth had a long-term capital loss of $9,000.Norma,the proprietor of Hyacinth Enterprises,withdrew $50,000 from Hyacinth during the year.Assuming Norma has no other capital gains or losses,how does this information affect her taxable income for 2010?

A) Increases Norma's taxable income by $97,000 ($100,000 ordinary business income - $3,000 long-term capital loss) .
B) Increases Norma's taxable income by $41,000 ($50,000 ordinary business income - $9,000 long-term capital loss) .
C) Increases Norma's taxable income by $100,000.
D) Increases Norma's taxable income by $50,000.
E) None of the above.