Exam 11: The Corporate Taxpayer

Mandrake, Inc. has book income of $569,300. Its income includes a $50,700 bad debt expense, determined by the allowance method. Actual write offs this year were $48,000. Based only on this information, compute Mandrake's taxable income.

Sonic Corporation has a 35% marginal tax rate and received $10,000 of dividends from Roller, Inc., a U.S. corporation in which Sonic owns less than 2% of the outstanding stock. Sonic's effective tax rate on the Roller dividend is:

Doctors Inc. is a corporation owned by four physicians in which they operate their medical practice. For the current year, Doctors Inc. had taxable income of $135,000. What is its regular tax liability?

Rogers, Inc. owns 12% of Lampe Corporation's voting common stock. During the current year, Rogers generated $50,000 operating income and received $8,000 dividends from Lampe. Only $1,600 of the dividend is taxable.

Calliwell Corporation is a Colorado corporation engaged in the manufacture and sale of computer components. This year, it earned $2 million of net income from this qualified activity. Before the domestic production activities deduction, its taxable income is $2,100,000 and compensation paid to its U.S. workforce is $670,000. Its taxable income is:

Thunder, Inc. has invested in the stock of several corporations and has $500,000 operating income before dividends. Calculate Thunder's dividends-received deduction and taxable income:

This year, Sonoma Corporation received the following dividends: Before considering the above dividends, Sonoma has taxable income of $550,000. Calculate Sonoma's allowable dividends-received deduction and taxable income.

The federal tax law considers the member corporations of an affiliated group to be a single entity for federal tax purposes. An example of this treatment is the requirement to share the 15% tax bracket.

Which of the following is a primary legal characteristic of the corporate form of business?

In terms of dispersal of ownership, corporations are classified as either closely held or publicly held.

Sunny Vale Co. reported the following for the current tax year: Compute Sunny Vale's total income tax liability.

Which of the following statements regarding corporate tax filing requirements is false?

Assuming that the corporation has a 34% MTR, which of the following statements is true?

Loda Inc. made an $8,300 nondeductible charitable contribution and a $2,000 nondeductible political contribution this year. Which of the following statements is true?

Torquay Inc.'s 2014 taxable income was $9,782,200, and its tax liability was $3,325,948. Torquay's director of tax estimates that the corporation's 2015 taxable income will be $13,350,000. Use the corporate tax rate schedule to compute Torquay's 2015 estimated tax payment due on April 15, 2015.

Lexington Associates, Inc. is a personal service corporation. This year, Lexington reported $75,000 of taxable income. Which of the following statements regarding Lexington's regular tax liability is true?

A corporation that owns more than $10 million of total assets uses which schedule to reconcile book income to taxable income?

The corporate alternative minimum tax rate is 26% of AMTI in excess of the AMT exemption.

The burden of corporate taxation is often borne by corporate shareholders, customers, employees, and suppliers.

Which of the following items is not used to compute the Domestic Production Activities Deduction?