Question 1

Jeffrey Corporation has asked you to prepare its corporate federal income tax return.What issue do you need to address in considering whether Schedule M-3 is required?

Accepted Answer

Whether to

Question 2

In 2011,Summer Corporation earns domestic gross receipts of $2 million and incurs allocable expenses of $800,000.It has $400,000 of income from other sources,resulting in taxable income of $1.6 million before the U.S.production activities deduction.What is its U.S.production activities deduction?

Accepted Answer

A) $120,000 
B) $108,000 
C) $60,000 
D) $36,000 
A) $120,000 
B) $108,000 
C) $60,000 
D) $36,000

Question 3

Which of the following types of evidence indicate that a valuation allowance is needed to reduce the deferred tax asset?

Accepted Answer

A) history of profits 
B) excess of appreciated asset values over basis 
C) existing contracts or sales backlogs,which will generate significant future income 
D) short carryback or carryover periods 
A) history of profits 
B) excess of appreciated asset values over basis 
C) existing contracts or sales backlogs,which will generate significant future income 
D) short carryback or carryover periods

Question 4

Which of the following items indicate that a company does not need a valuation allowance?

Accepted Answer

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 without considering the deferred tax asset 
D) All of the above are correct. 
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 without considering the deferred tax asset 
D) All of the above are correct.

Question 5

Identify which of the following statements is true.

Accepted Answer

A) Organizational expenditures incurred by a corporation do not include the cost of accounting services necessary to create the corporation. 
B) Organizational expenditures incurred by a corporation do not include the cost of printing stock. 
C) Unamortized organizational expenses cannot be deducted when the corporation is liquidated. 
D) All of the above are false. 
A) Organizational expenditures incurred by a corporation do not include the cost of accounting services necessary to create the corporation. 
B) Organizational expenditures incurred by a corporation do not include the cost of printing stock. 
C) Unamortized organizational expenses cannot be deducted when the corporation is liquidated. 
D) All of the above are false.

Question 6

Woods and Tiger Corporations have only one class of stock outstanding,owned by the following individuals:
   Are Woods and Tiger members of a brother-sister controlled group? Why or why not?

Accepted Answer

Five or fewer individuals own at least 8

Question 7

Maxwell Corporation reports the following results:   Maxwell's dividends-received deduction is

Accepted Answer

A) $42,000. 
B) $49,000. 
C) $56,000. 
D) $70,000. 
A) $42,000. 
B) $49,000. 
C) $56,000. 
D) $70,000.

Exam 3: the Corporate Income Tax

Jeffrey Corporation has asked you to prepare its corporate federal income tax return.What issue do you need to address in considering whether Schedule M-3 is required?

In 2011,Summer Corporation earns domestic gross receipts of $2 million and incurs allocable expenses of $800,000.It has $400,000 of income from other sources,resulting in taxable income of $1.6 million before the U.S.production activities deduction.What is its U.S.production activities deduction?

Which of the following types of evidence indicate that a valuation allowance is needed to reduce the deferred tax asset?

Which of the following items indicate that a company does not need a valuation allowance?

Identify which of the following statements is true.

Woods and Tiger Corporations have only one class of stock outstanding,owned by the following individuals: Are Woods and Tiger members of a brother-sister controlled group? Why or why not?

Maxwell Corporation reports the following results: Maxwell's dividends-received deduction is

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