Question 1

Identify which of the following statements is false.

Accepted Answer

A) A corporation must file a tax return annually. 
B) A corporation can obtain an automatic six-month extension of time to file its tax return. 
C) The IRS will permit an extension of time to file a corporate return beyond the original due date only when the corporation's delay is reasonable. 
D) The IRS can rescind the extension period. 
A) A corporation must file a tax return annually. 
B) A corporation can obtain an automatic six-month extension of time to file its tax return. 
C) The IRS will permit an extension of time to file a corporate return beyond the original due date only when the corporation's delay is reasonable. 
D) The IRS can rescind the extension period. C

Question 2

Deferred tax liabilities occur when expenses are deductible for book purposes before tax purposes.

Accepted Answer

A) True 
 B)False  False

Question 3

Identify which of the following statements is true.

Accepted Answer

A) When a corporation donates appreciated capital gain property to a charity,the amount of the contribution deduction generally equals the property's FMV. 
B) When a corporation donates appreciated capital gain property to a private nonoperating foundation,the corporation's contribution is limited to the property's FMV minus the ordinary gain that would have resulted from the property's sale. 
C) When a corporation contributes appreciated property to a charity,the charitable contribution deduction is the property's FMV or adjusted basis,depending on the election made by the taxpayer. 
D) All of the above are false. 
A) When a corporation donates appreciated capital gain property to a charity,the amount of the contribution deduction generally equals the property's FMV. 
B) When a corporation donates appreciated capital gain property to a private nonoperating foundation,the corporation's contribution is limited to the property's FMV minus the ordinary gain that would have resulted from the property's sale. 
C) When a corporation contributes appreciated property to a charity,the charitable contribution deduction is the property's FMV or adjusted basis,depending on the election made by the taxpayer. 
D) All of the above are false. A

Question 4

Which of the following results in a deferred tax asset?

Accepted Answer

A) Revenue or gains are recognized earlier for book purposes than for tax purposes. 
B) Operating loss or tax credit carryforwards exist. 
C) Tax basis of an asset is less than its book. 
D) Expenses are deductible earlier for tax purposes than for book purposes. 
A) Revenue or gains are recognized earlier for book purposes than for tax purposes. 
B) Operating loss or tax credit carryforwards exist. 
C) Tax basis of an asset is less than its book. 
D) Expenses are deductible earlier for tax purposes than for book purposes.

Question 5

Which of the following statements is correct?

Accepted Answer

A) Deferred tax assets/liabilities are always classified as current on the balance sheet. 
B) The classification of deferred tax assets/liabilities depends on whether the related asset is current or noncurrent. 
C) Deferred tax assets are classified based on their expected reversal dates. 
D) Deferred tax assets/liabilities are classified as noncurrent on the balance sheet. 
A) Deferred tax assets/liabilities are always classified as current on the balance sheet. 
B) The classification of deferred tax assets/liabilities depends on whether the related asset is current or noncurrent. 
C) Deferred tax assets are classified based on their expected reversal dates. 
D) Deferred tax assets/liabilities are classified as noncurrent on the balance sheet.

Question 6

All of the taxable income of a personal service corporation is taxed at a flat 35% rate.

Accepted Answer

A) True 
 B)False

Question 7

During the year,Soup Corporation contributes some of its inventory to a qualified charity for use in feeding the needy.The inventory has an FMV of $85,000 and an adjusted basis of $25,000.What is the amount of Soup Corporation's charitable contribution deduction for the donation of the inventory as determined without regard to the overall charitable contribution limitation?

Accepted Answer

$25,000 + 0.50 ($85,000 - $25,

Question 8

The following expenses are incurred by Salter Corporation when it is organized on July 1:
   Salter commenced business on September 8.What is the maximum amount of organizational expenditures that can be deducted by the corporation for its first tax year ending December 31?

Accepted Answer

($20,000 + $5,000)= $25,000 to

Question 9

What are start-up expenditures?

Accepted Answer

Start-up expenditures usually

Question 10

Richards Corporation has taxable income of $280,000 calculated before the charitable contribution deduction and before its dividends-received deduction of $34,000.Richards makes cash contributions of $35,000 to charitable organizations.What is Richards Corporation's charitable contribution deduction for the current year?

Accepted Answer

A) $24,600 
B) $28,000 
C) $31,400 
D) $35,000 
A) $24,600 
B) $28,000 
C) $31,400 
D) $35,000

Question 11

Corporations may carry charitable contributions in excess of the income limitation forward for five years.

Accepted Answer

A) True 
 B)False

Question 12

Identify which of the following statements is true.

Accepted Answer

A) A corporation that is a member of an affiliated group filing a consolidated tax return may be allowed a tax year which is different from the group's parent. 
B) An S corporation must generally use a calendar year. 
C) A corporation's first year must cover a twelve-month period. 
D) All of the above are false. 
A) A corporation that is a member of an affiliated group filing a consolidated tax return may be allowed a tax year which is different from the group's parent. 
B) An S corporation must generally use a calendar year. 
C) A corporation's first year must cover a twelve-month period. 
D) All of the above are false.

Question 13

When computing corporate taxable income,what is the proper sequencing of deductions?

Accepted Answer

The correct order for taking deductions

Question 14

Dreyfuss Corporation reports the following items:   The unappropriated retained earnings at year-end are

Accepted Answer

A) $1,000,000. 
B) $1,050,000. 
C) $1,500,000. 
D) $2,050,030. 
A) $1,000,000. 
B) $1,050,000. 
C) $1,500,000. 
D) $2,050,030.

Question 15

Beta Corporation recently purchased 100% of XYZ Corporation stock.You are their CPA.What tax issues need to be addressed before determining whether or not to file a consolidated tax return?

Accepted Answer

• Does either Beta or XYZ have losses?
•

Question 16

Once a corporation has elected a taxable year,it can change the taxable year without IRS permission if

Accepted Answer

A) the resulting short period has a net operating loss of $100,000 that the corporation wants to carry forward. 
B) the corporation changed its taxable year seven years ago. 
C) the corporation is not an S Corporation. 
D) a corporation can change its taxable year without IRS permission in all of the above situations. 
A) the resulting short period has a net operating loss of $100,000 that the corporation wants to carry forward. 
B) the corporation changed its taxable year seven years ago. 
C) the corporation is not an S Corporation. 
D) a corporation can change its taxable year without IRS permission in all of the above situations.

Question 17

Super Corporation gives a painting to a museum for public display on August 6.The painting was purchased on April 3 of the same year for $20,000 and is worth $30,000 at the date of gift.Also,Super accrues a charitable contribution on December 30 and pays the $12,000 contribution on February 1 of the next year.Super Corporation is a calendar-year corporation that uses the accrual method of accounting.Before considering the 10% limitation rule,the maximum deduction for the current year is

Accepted Answer

A) $12,000. 
B) $20,000. 
C) $30,000. 
D) $32,000. 
A) $12,000. 
B) $20,000. 
C) $30,000. 
D) $32,000.

Question 18

Organizational expenses incurred after 2004 are amortized over five years.

Accepted Answer

A) True 
 B)False

Question 19

Dumont Corporation reports the following results in the current year:
   What is Dumont's taxable income?

Accepted Answer

@#IMG-DLM& 
*Dumont's DRD is not restric

Question 20

Identify which of the following statements is false.

Accepted Answer

A) A corporation with annual gross receipts of $5,000,000 or less can use the accrual method to account for sales,cost of goods sold,inventories,accounts receivable and payable,and the cash method for other income and expenses. 
B) Casualty losses incurred by a corporation are deductible subject to a nondeductible floor similar to those applicable to individuals. 
C) The passive loss rules do not apply to widely held C corporations. 
D) Corporations may receive a deduction for dividends received from other corporations. 
A) A corporation with annual gross receipts of $5,000,000 or less can use the accrual method to account for sales,cost of goods sold,inventories,accounts receivable and payable,and the cash method for other income and expenses. 
B) Casualty losses incurred by a corporation are deductible subject to a nondeductible floor similar to those applicable to individuals. 
C) The passive loss rules do not apply to widely held C corporations. 
D) Corporations may receive a deduction for dividends received from other corporations.

Exam 3: the Corporate Income Tax

Identify which of the following statements is false.

Deferred tax liabilities occur when expenses are deductible for book purposes before tax purposes.

Identify which of the following statements is true.

Which of the following results in a deferred tax asset?

Which of the following statements is correct?

All of the taxable income of a personal service corporation is taxed at a flat 35% rate.

The following expenses are incurred by Salter Corporation when it is organized on July 1: Salter commenced business on September 8.What is the maximum amount of organizational expenditures that can be deducted by the corporation for its first tax year ending December 31?

What are start-up expenditures?

Corporations may carry charitable contributions in excess of the income limitation forward for five years.

Identify which of the following statements is true.

When computing corporate taxable income,what is the proper sequencing of deductions?

Dreyfuss Corporation reports the following items: The unappropriated retained earnings at year-end are

Beta Corporation recently purchased 100% of XYZ Corporation stock.You are their CPA.What tax issues need to be addressed before determining whether or not to file a consolidated tax return?

Once a corporation has elected a taxable year,it can change the taxable year without IRS permission if

Organizational expenses incurred after 2004 are amortized over five years.

Dumont Corporation reports the following results in the current year: What is Dumont's taxable income?

Identify which of the following statements is false.

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