Question 1

For purposes of the production activities deduction,domestic production gross receipts do not include which of the following?

Accepted Answer

A) construction performed in the United States 
B) engineering or architectural services performed in the United States for construction projects in the United States 
C) lease,rental,license,sale,or other disposition of qualified production property manufactured,produced,grown,or extracted in whole or in significant part within the United States 
D) sale of food and beverages prepared at a retail establishment 
A) construction performed in the United States 
B) engineering or architectural services performed in the United States for construction projects in the United States 
C) lease,rental,license,sale,or other disposition of qualified production property manufactured,produced,grown,or extracted in whole or in significant part within the United States 
D) sale of food and beverages prepared at a retail establishment

Question 2

Which of the following items is a temporary difference between tax income and financial accounting income?

Accepted Answer

A) production activities deduction 
B) proceeds on life insurance on a key executive 
C) dividends-received deduction 
D) depreciation 
A) production activities deduction 
B) proceeds on life insurance on a key executive 
C) dividends-received deduction 
D) depreciation

Question 3

Dexter Corporation reports the following results for the current year:
   In addition,Dexter has a $25,000 NOL carryover from the preceding tax year.What is Dexter's taxable income for the current year?

Accepted Answer

@#IMG-DLM& ^aThe charitable contribution

Question 4

Webster,who owns all the Bear Corporation stock,purchases a dump truck from Bear Corporation in January.The truck cost $12,000 and has a $10,000 adjusted basis at the time of the sale.Webster pays Bear the truck's $8,000 FMV.Later in the same year,Webster sells the dump truck to an unrelated party for $6,000.Webster can recognize a loss of

Accepted Answer

A) $4,000. 
B) $2,000. 
C) $3,000. 
D) $5,000. 
A) $4,000. 
B) $2,000. 
C) $3,000. 
D) $5,000.

Question 5

Corporations may deduct the adjusted basis of inventory plus one-half of the excess of the property's FMV over its adjusted basis if the inventory is used for the care of the ill,needy,or infants.

Accepted Answer

A) True 
 B)False

Question 6

On December 10,2011,Dell Corporation (a calendar-year taxpayer)accrues an obligation for a $100,000 bonus to Muriel,a sales representative who had had an outstanding year.Muriel owns no Dell Corporation stock.The bonus is paid on May 5,2012.What is Dell's deduction for 2011? What is Dell's deduction for 2012?

Accepted Answer

Dell is allowed $0 deduction f

Question 7

Identify which of the following statements is true.

Accepted Answer

A) A corporate tax return must be filed by the fifteenth day of the fourth month following the close of the corporation's tax year. 
B) A corporation is required to file a tax return even if it has no taxable income. 
C) A corporation with gross receipts,total income,and total assets of $1,000,000 or less is permitted to file Form 1120-A. 
D) All of the above are false. 
A) A corporate tax return must be filed by the fifteenth day of the fourth month following the close of the corporation's tax year. 
B) A corporation is required to file a tax return even if it has no taxable income. 
C) A corporation with gross receipts,total income,and total assets of $1,000,000 or less is permitted to file Form 1120-A. 
D) All of the above are false.

Question 8

Glacier Corporation,a large retail sales company,has a taxable income of $20,000,000.What is Glacier Corporation's tax?

Accepted Answer

A) $6,800,000 
B) $7,000,000 
C) $7,800,000 
D) $7,200,000 
A) $6,800,000 
B) $7,000,000 
C) $7,800,000 
D) $7,200,000

Question 9

Identify which of the following statements is true.

Accepted Answer

A) A corporation that accrues compensation payable to an employee must pay the amount within two and one-half months after the close of the taxable year to deduct the amount in the year of the accrual. 
B) Accrued compensation that is deductible in the year of accrual is considered to be part of an IRS deferred compensation plan. 
C) Accrued compensation not paid within three and one-half months after the close of the corporation tax year is deducted in the year following the accrual. 
D) All of the above are false. 
A) A corporation that accrues compensation payable to an employee must pay the amount within two and one-half months after the close of the taxable year to deduct the amount in the year of the accrual. 
B) Accrued compensation that is deductible in the year of accrual is considered to be part of an IRS deferred compensation plan. 
C) Accrued compensation not paid within three and one-half months after the close of the corporation tax year is deducted in the year following the accrual. 
D) All of the above are false.

Question 10

Corporations are permitted to deduct $3,000 in net capital losses annually.

Accepted Answer

A) True 
 B)False

Question 11

Identify which of the following statements is true.

Accepted Answer

A) The dividends-received deduction is designed to reduce double taxation of corporate dividends. 
B) The full 80% dividends-received deduction is available without restriction. 
C) If a corporation receives dividends eligible for the 80% dividends-received deduction and the 70% dividends-received deduction,the 70% dividends-received deduction reduces taxable income prior to the 80% deduction. 
D) All of the above are false. 
A) The dividends-received deduction is designed to reduce double taxation of corporate dividends. 
B) The full 80% dividends-received deduction is available without restriction. 
C) If a corporation receives dividends eligible for the 80% dividends-received deduction and the 70% dividends-received deduction,the 70% dividends-received deduction reduces taxable income prior to the 80% deduction. 
D) All of the above are false.

Question 12

Jackson Corporation,not a dealer in securities,realizes taxable income of $80,000 from the operation of its business.Additionally,Jackson Corporation realizes a $10,000 long-term capital loss from the sale of marketable securities.Explain the treatment of the loss on the corporate return for this and any other years.

Accepted Answer

The loss cannot be deducted this year si

Question 13

Delux Corporation,a retail sales corporation,has a taxable income of $500,000.Delux Corporation's regular tax liability is

Accepted Answer

A) $158,250. 
B) $162,200. 
C) $170,000. 
D) $175,000. 
A) $158,250. 
B) $162,200. 
C) $170,000. 
D) $175,000.

Question 14

Money Corporation has the following income and expenses for the tax year:   What is Money's net operating loss?

Accepted Answer

A) $494,000 
B) $480,000 
C) $520,000 
D) $220,000 
A) $494,000 
B) $480,000 
C) $520,000 
D) $220,000

Question 15

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?

Accepted Answer

• What is Quality's current-year taxable

Question 16

Identify which of the following statements is false.

Accepted Answer

A) A corporation's fiscal year generally must end on the last day of the month. 
B) A fiscal year may not end on December 31. 
C) A new corporation can elect a fiscal year that runs from February 16 to February 15 of the following year. 
D) A corporation's first tax year may not cover a full 12-month period. 
A) A corporation's fiscal year generally must end on the last day of the month. 
B) A fiscal year may not end on December 31. 
C) A new corporation can elect a fiscal year that runs from February 16 to February 15 of the following year. 
D) A corporation's first tax year may not cover a full 12-month period.

Question 17

Booth Corporation sells a building classified as a residential rental property for $200,000.The MACRS straight-line depreciation taken is $20,000 and the adjusted basis of the building is $170,000.Booth Corporation must recognize ordinary income of

Accepted Answer

A) $30,000. 
B) $20,000. 
C) $4,000. 
D) $0. 
A) $30,000. 
B) $20,000. 
C) $4,000. 
D) $0.

Question 18

Bishop Corporation reports taxable income of $700,000 on its tax return.Given the following information from the corporation's records,determine Bishop's net income per its financial accounting records.

Accepted Answer

A) $520,000 
B) $620,000 
C) $660,000 
D) $560,000 
A) $520,000 
B) $620,000 
C) $660,000 
D) $560,000

Question 19

Bright Corporation purchased residential real estate five years ago for $450,000,of which $50,000 was allocated to the land and $400,000 was allocated to the building.Bright booked straight-line MACRS deductions of $55,000 during the past five years.This year,Bright sells the property for $550,000,of which $100,000 is allocated to the land and $450,000 is allocated to the building.What is the amount and character of Bright's recognized gain or loss on the sale?

Accepted Answer

Bright recognizes $50,000 ($100,000 - $5

Question 20

The U.S.production activities deduction is based on a percentage of which of the following?

Accepted Answer

A) taxable income before the production activities deduction 
B) 50% of W-2 wages 
C) qualified production activities income 
D) both A and C above 
A) taxable income before the production activities deduction 
B) 50% of W-2 wages 
C) qualified production activities income 
D) both A and C above

Exam 3: the Corporate Income Tax

For purposes of the production activities deduction,domestic production gross receipts do not include which of the following?

Which of the following items is a temporary difference between tax income and financial accounting income?

Dexter Corporation reports the following results for the current year: In addition,Dexter has a $25,000 NOL carryover from the preceding tax year.What is Dexter's taxable income for the current year?

Corporations may deduct the adjusted basis of inventory plus one-half of the excess of the property's FMV over its adjusted basis if the inventory is used for the care of the ill,needy,or infants.

Identify which of the following statements is true.

Glacier Corporation,a large retail sales company,has a taxable income of $20,000,000.What is Glacier Corporation's tax?

Identify which of the following statements is true.

Corporations are permitted to deduct $3,000 in net capital losses annually.

Identify which of the following statements is true.

Delux Corporation,a retail sales corporation,has a taxable income of $500,000.Delux Corporation's regular tax liability is

Money Corporation has the following income and expenses for the tax year: What is Money's net operating loss?

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?

Identify which of the following statements is false.

Booth Corporation sells a building classified as a residential rental property for $200,000.The MACRS straight-line depreciation taken is $20,000 and the adjusted basis of the building is $170,000.Booth Corporation must recognize ordinary income of

Bishop Corporation reports taxable income of $700,000 on its tax return.Given the following information from the corporation's records,determine Bishop's net income per its financial accounting records.

The U.S.production activities deduction is based on a percentage of which of the following?

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