Info
Warning
Danger

Study Resources (Accounting)

41) Garth Corporation donates inventory having an adjusted basis of $40,000 and an FMV of $150,000 to a qualified public charity. The inventory will be used by the charity to care for the ill. The maximum charitable contribution deduction before consideration of the 10% limitation is A) $40,000. B) $55,000. C) $80,000. D) $95,000. 42).
3 Views
View Answer
95) Dexter Corporation reports the following results for the current year: Gross income from operations              $90,000 Dividends from less than 20%-owned corporations              50,000 Operating expenses              75,000 Charitable contributions              10,000 In addition, Dexter has a $25,000 NOL carryover from the preceding tax year. What is Dexter's taxable income for the current year? 96) Chase Corporation reports the.
2 Views
View Answer
78) River Corporation's taxable income is $25,000, after deducting a $5,000 NOL carryover from last year and after claiming a $10,000 dividends-received deduction. What is the current E&P? 79) White Corporation is a calendar-year taxpayer. Wilhelmina owns all of its stock. Her basis for the stock is $25,000. On March 1.
2 Views
View Answer
51) Identify which of the following statements is true. A) Stock ownership attributed to a corporation from one of its shareholders cannot be attributed to another of the corporation's shareholders under the Sec. 318 attribution rules. B) Under the attribution rules relating to stock redemptions, a person who has an option to.
2 Views
View Answer
41) Identify which of the following statements is false. A) Askew Corporation has ten unrelated shareholders, each of whom owns 10% of the outstanding stock. This corporation is a personal holding company. B) Stock owned by an individual, in addition to stock attributed from her spouse, parents, children, and siblings, are all.
2 Views
View Answer
80) Lass Corporation reports a $25,000 net capital loss this year. The corporation reports the following net capital gains during the past three years. Year Net Long-Term Capital Gain Net Short-Term Capital Gain Third previous year Year before last Last year $5,000 7,000 -0- $6,000   3,000 -0- Determine the amount of net capital loss carried back to each preceding tax year.
2 Views
View Answer
111) John, the sole shareholder of Photo Specialty Corporation has had an exceptional year. He is considering issuing himself a large bonus in lieu of a dividend. You are concerned about unreasonable compensation. What issues must be considered? 112) Stone Corporation redeems 1,000 share of its stock from Steve for $100,000..
4 Views
View Answer
82) Payment Corporation has accumulated E&P of $19,000 and current E&P of $28,000. During the year, the corporation makes the following distributions to its sole shareholder: Date Amount Distributed April 1 June 1 August 1 November 1 $20,000 20,000 15,000 5,000 The sole shareholder's basis in her stock is $45,000. What are the tax consequences of the June 1 distribution? 83) Green.
2 Views
View Answer
1) Corporate distributions that exceed earnings and profits are always capital gains. 2) Corporations may always use retained earnings as a substitute for earnings and profits. 3) When computing E & P, Section 179 property must be expensed ratably over a five-year period, starting with the month in which it is expensed.
9 Views
View Answer
72) Hydrangia Corporation reports the following results for the current year: Taxable income              $300,000 Interest on private activity bonds              20,000 Life insurance proceeds              250,000 Dividends-received deduction              50,000 Depreciation claimed for: Taxable income purposes              175,000 AMT purposes              130,000 Adjusted current earnings              800,000 What is Hydrangia Corporation's alternative minimum tax liability? 73) Barker Corporation, a personal service company, has $200,000 of.
2 Views
View Answer
117) Discuss the estimated tax filing requirements for a C corporation. 118) What are the four principles underlying ASC 740? 119) Newco Corporation has asked you to help determine whether it should use the accrual method or the cash method of accounting. What are the tax issues involved in making this determination? 120).
2 Views
View Answer
76) Barker Corporation, a personal service company, has $200,000 of taxable income. Barker has tax preferences and positive adjustments of $200,000 and negative adjustments of $140,000 for alternative minimum tax purposes. No credits are available. Barker's regular tax liability is $70,000. How much is its alternative minimum tax liability? 77) Drury.
2 Views
View Answer
92) Carter Corporation reports the following results for the current year: Gross profits on sales              $660,000 Dividends from less than 20%-owned corporations              300,000 Operating expenses              650,000 a)What is Carter Corporation's taxable income for the current year? b)How would your answer to Part (a) change if Carter's operating expenses are instead $700,000? c)How would your answer to.
2 Views
View Answer
11) Corporate estimated tax payments are due April 15, June 15, September 15, and January 15. 12) A deferred tax asset indicates that a firm will realize the tax benefit of an event sometime in the future. 13) Deferred tax liabilities occur when expenses are deductible for book purposes before tax purposes. 14).
10 Views
View Answer
21) Dixie Corporation distributes $31,000 to its sole shareholder, Sally. At the time of the distribution, Dixie's E&P is $25,000 and Sally's basis in her Dixie stock is $10,000. Sally's basis in her Dixie stock after the distribution is A) $4,000. B) $10,000. C) $25,000. D) $31,000. 22) Crossroads Corporation distributes $60,000 to its sole.
2 Views
View Answer
1) The alternative minimum tax is the excess of the tentative minimum tax amount over the regular tax amount. 2) Corporations cannot use the installment method in calculating alternative minimum taxable income (AMTI) for noninventory items. 3) The NOL deduction is calculated the same for regular and alternative minimum tax purposes. 4) The.
12 Views
View Answer
124) Quality Corporation, a regular corporation, has an opportunity to realize $50,000 of additional income in either the current year or next year. What tax issues need to be considered in determining when to realize the income? 125) Beta Corporation recently purchased 100% of XYZ Corporation stock. You are their CPA..
3 Views
View Answer
100) Maple Corporation distributes land to a noncorporate shareholder. Explain how the following items are computed: a)The amount of the distribution. b)The amount of the dividend. c)The basis of the land to the shareholder. d)The start of the holding period for the land. How would your answers change if the distribution was made to a.
2 Views
View Answer
31) Which of the following items indicate that a company does not need a valuation allowance? A) existing sales contracts that will produce sufficient income to realize the deferred tax asset B) excess of appreciated asset value over tax basis sufficient to realize the deferred tax asset C) a strong history of earnings.
3 Views
View Answer
11) To avoid the accumulated earnings tax, a corporation needs to have a definite plan for expending the accumulated earnings. 12) Identify which of the following statements is false. A) The alternative minimum tax is the excess of the tentative minimum tax amount over the regular tax amount. B) All corporations with gross.
4 Views
View Answer
51) Maxwell Corporation reports the following results: Gross income from operations $90,000 Dividends received from 18%-owned domestic corporation 70,000 Expenses 100,000 Maxwell's dividends-received deduction is A) $42,000. B) $49,000. C) $56,000. D) $70,000. 52) Identify which of the following statements is true. A) The dividends-received deduction is designed to reduce double taxation of corporate dividends. B) The full 80% dividends-received deduction is available.
3 Views
View Answer
98) Courtney Corporation had the following income and expenses for the tax year: Gross profit on sales              $300,000 Expenses              $600,000 Dividends received from less-than-20%- owned domestic corporations              $ 20,000 Courtney had taxable income for the past three years of: 2009              $100,000 2010              $120,000 2011              $ 80,000 a)Determine the corporation's NOL for the current year. b)Determine the amount of NOL carried.
2 Views
View Answer
102) Woods and Tiger Corporations have only one class of stock outstanding, owned by the following individuals: Stock Ownership Percentages ShareholderWoods Corp.Tiger Corp. John80%25% Sarah20%75% Are Woods and Tiger members of a brother-sister controlled group? Why or why not? 103) Ben and Jerry Corporations are members of the Ben-Jerry controlled group. The corporations file separate tax.
2 Views
View Answer
86) Chambers Corporation is a calendar year taxpayer using the accrual method of accounting. In 2011, its board of directors authorizes a $20,000 contribution to the Boy Scouts. Chambers pays the contribution on March 12, 2012. What is the maximum contribution allowed in 2011? What is the maximum contribution allowed.
2 Views
View Answer
110) Describe the domestic production activities deduction. 111) What are the various levels of stock ownership by corporate shareholders for the dividends-received deduction (DRD)? What is the DRD% for each level of ownership? 112) How does the use of an NOL differ for individual and corporate taxpayers? 113) When computing corporate taxable income..
3 Views
View Answer
31) Wills Corporation, which has accumulated a current E&P totaling $70,000, distributes land to its sole shareholder, an individual. The land has an FMV of $75,000 and an adjusted basis of $60,000. The shareholder assumes a $15,000 liability associated with the land. The transaction will have the following tax consequences. A).
2 Views
View Answer
31) Certain adjustments must be made to alternative minimum taxable income (AMTI) to arrive at adjusted current earnings (ACE). Which one of the following adjustments increases AMTI to arrive at ACE? A) federal income taxes paid B) the 80% dividends-received deduction C) gain realized on the installment sale of noninventory property D) excess of.
2 Views
View Answer
87) Digger Corporation has $50,000 of current and accumulated E&P. On March 1, Digger distributes land with a $30,000 FMV and a $17,500 adjusted basis to Dave, its sole shareholder. The land is subject to a $5,000 liability which Dave assumes. a)What are the amount and character of the distribution? b)What is.
3 Views
View Answer
61) When using the Bardahl formula, an increase in accounts payable (while holding purchases and operating expenses constant) has which of the following effects on the working capital requirements? A) increase B) decrease C) no effect D) increase, decrease, or no effect, depending on other factors 62) Identify which of the following statements is true. A).
10 Views
View Answer
21) Which of the following items is a temporary difference between tax income and financial accounting income? A) production activities deduction B) proceeds on life insurance on a key executive C) dividends-received deduction D) depreciation 22) Once a corporation has elected a taxable year, it can change the taxable year without IRS permission if A) the.
3 Views
View Answer
21) Identify which of the following statements is false. A) Tax-exempt interest on certain private activity bonds may be taxed under the alternative minimum tax. B) Tax preference items and adjustments may either increase or decrease taxable income to obtain AMTI. C) Depending on the date an asset is placed in service, depreciation.
2 Views
View Answer