ACC - Benton Company (BC)

Benton Company (BC) has one owner, who is in the 33% Federal income tax bracket. BC's gross income is $395,000, and its ordinary trade or business deductions are $245,000. Compute the Federal income tax liability on BC's income for 2013 under the following assumptions: A) BC is operated as a proprietorship, and the owner withdraws $100,000 for personal use. B) BC is operated as a corporation, pays out $100,000 as salary, and pays no dividends to its shareholders. C) BC is operated as a corporation and pays out no salary or dividends to its shareholder. D) BC is operated as a corporation, pays out $100,000 as salary to its shareholder, and pays out the remainder of its earnings as dividends.