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Question 2 10 pts During a recent IRS audit, the revenue agent decided that Apple, an individual, used his closely held corporation. Fruit Tree Inc.

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Question 2 10 pts During a recent IRS audit, the revenue agent decided that Apple, an individual, used his closely held corporation. Fruit Tree Inc. to avoid shareholder tax by accumulating earnings beyond the reasonable needs of the business. Fruit Tree Ine's taxable income for the year was $875.000 and it paino dividends. Compute Fruit Tree Inc's accumulated earnings tax, assuming that it had accumulated $227,500 after-tax income in prior years. Also assume that the accumulated earnings tax rate is 20% and up to $250,000 can be accumulated without incurring the accumulated earningstar $175.000 O $170,500 $148.750 O $125,000

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