Question 1

Island Corporation has the following income and expense items for the year:
 
The taxable income of Island Corporation is

Accepted Answer

A) $100,000. 
B) $70,000. 
C) $47,000. 
D) $42,000. 
A) $100,000. 
B) $70,000. 
C) $47,000. 
D) $42,000. D

Question 2

Carter Corporation reports the following results for the current year:   
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 Part (a)change if Carter's operating expenses are instead $760,000?

Accepted Answer

a)Carter's taxable income is $100,000 ($660,000 + $300,000 - $650,000 - $210,000 DRD).The DRD limitation is $217,000 [0.70 × ($660,000 + $300,000 - $650,000)] and does not apply.
b)Carter's taxable income is $78,000 ($660,000 + $300,000 - $700,000 - $182,000 DRD).Since an NOL is not created by claiming the full $210,000 DRD (see Part a),the DRD is limited to 70% of $260,000 (660,000 + 300,000 - 700,000),or $182,000.
c)Carter reports an NOL of $10,000 ($660,000 + $300,000 - $760,000 - $210,000 DRD).No limitation on the DRD is imposed if the result is an NOL when the full $210,000 DRD is claimed.

Question 3

Andy owns 20% of North Corporation and 60% of Tent Corporation.North and Tent have only one class of stock outstanding.Barbara owns 50% of North Corporation and 20% of Tent Corporation.North and Tent Corporations will be brother-sister corporations if

Accepted Answer

A) no stock ownership change occurs. 
B) Barbara acquires an additional 10% of North stock. 
C) Andy acquires an additional 10% of North stock and Barbara acquires an additional 10% of Tent stock. 
D) Barbara acquires an additional 10% of North stock and an additional 10% of Tent stock. 
A) no stock ownership change occurs. 
B) Barbara acquires an additional 10% of North stock. 
C) Andy acquires an additional 10% of North stock and Barbara acquires an additional 10% of Tent stock. 
D) Barbara acquires an additional 10% of North stock and an additional 10% of Tent stock. C

Question 4

Access Corporation,a large manufacturer,has a taxable income of $16,000,000.Access Corporation's tax is

Accepted Answer

A) $5,440,000. 
B) $5,530,000. 
C) $5,600,000. 
D) $5,680,000. 
A) $5,440,000. 
B) $5,530,000. 
C) $5,600,000. 
D) $5,680,000.

Question 5

Continental Corporation anticipates a 34% tax rate for the next several years and has a $500,000 NOL carryover.
a)What is the journal entry to record the NOL carryover's tax benefits,assuming that no valuation is needed?
b)What is the journal entry if Continental Corporation estimates that one-half of the NOL will not be realized?

Accepted Answer

The answer of Continental Corporation anticipates a 34% tax rate...

Question 6

A new corporation may generally select one of the following accounting methods with the exception of

Accepted Answer

A) cash method. 
B) accrual method. 
C) retail method. 
D) hybrid method. 
A) cash method. 
B) accrual method. 
C) retail method. 
D) hybrid method.

Question 7

Miller Corporation has gross income of $100,000,which includes $40,000 of dividends from a 10%-owned corporation.In addition,Miller has $80,000 of expenses.Miller's taxable income or loss is

Accepted Answer

A) $20,000. 
B) $6,000. 
C) $0. 
D) ($8,000). 
A) $20,000. 
B) $6,000. 
C) $0. 
D) ($8,000).

Question 8

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 9

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?

Accepted Answer

If a corporate shareholder owns less tha

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) A corporate capital loss can be carried back three years,and then can be carried forward five years. 
B) Corporate capital loss carrybacks can offset corporate ordinary income earned in previous years. 
C) At the election of a corporation,a net capital loss carryback can be forgone and carried forward only. 
D) All of the above are false. 
A) A corporate capital loss can be carried back three years,and then can be carried forward five years. 
B) Corporate capital loss carrybacks can offset corporate ordinary income earned in previous years. 
C) At the election of a corporation,a net capital loss carryback can be forgone and carried forward only. 
D) All of the above are false.

Question 12

Sun and Moon Corporations each have only one class of stock outstanding.Their stock ownership is shown below.
 
Which of the four stock ownership changes that are illustrated is the minimum change that is needed if Sun and Moon Corporations are to be brother-sister corporations under the 50%-80% requirements? (Assume the two corporations are equally valued. )

Accepted Answer

A) No stock ownership change is required. 
B) Charles must acquire an additional 10% of Moon Corporation. 
C) Charles must acquire an additional 5% of Sun Corporation. 
D) Arthur must acquire an additional 30% of Moon Corporation. 
A) No stock ownership change is required. 
B) Charles must acquire an additional 10% of Moon Corporation. 
C) Charles must acquire an additional 5% of Sun Corporation. 
D) Arthur must acquire an additional 30% of Moon Corporation.

Question 13

Trail Corporation has gross profits on sales of $140,000 and deductible expenses of $180,000.In addition,Trail has a net capital gain of $60,000.Trail's taxable income is

Accepted Answer

A) a $20,000 loss. 
B) a $40,000 loss. 
C) $60,000. 
D) $20,000. 
A) a $20,000 loss. 
B) a $40,000 loss. 
C) $60,000. 
D) $20,000.

Question 14

Blueboy Inc.contributes inventory to a qualified charity for use in feeding the needy.The inventory has a $70,000 FMV and a $30,000 adjusted basis.Blueboy Inc.can take a charitable contribution deduction of

Accepted Answer

A) $20,000. 
B) $30,000. 
C) $50,000. 
D) $60,000. 
A) $20,000. 
B) $30,000. 
C) $50,000. 
D) $60,000.

Question 15

Corporate estimated tax payments are due April 15,June 15,September 15,and January 15.

Accepted Answer

A) True 
 B)False

Question 16

Evans Corporation has a $15,000 net capital loss in 2011.The corporation reported the following capital gain net income during the past three years.Identify which of the following statements is true.

Accepted Answer

A) The loss is used to offset the gains from 2010 and then carried back to offset $10,000 of the gains in 2008. 
B) The loss is used to offset the $11,000 of the 2009 gains and then carried back to offset $4,000 of the year 2008 net gain. 
C) The loss is used to offset $3,000 of the current year ordinary income,all of the year 2008 capital gains,and $7,000 of the year 2009 net gain. 
D) The loss is used to offset the year 2008 net gains,then $5,000 of the year 2009 net gains. 
A) The loss is used to offset the gains from 2010 and then carried back to offset $10,000 of the gains in 2008. 
B) The loss is used to offset the $11,000 of the 2009 gains and then carried back to offset $4,000 of the year 2008 net gain. 
C) The loss is used to offset $3,000 of the current year ordinary income,all of the year 2008 capital gains,and $7,000 of the year 2009 net gain. 
D) The loss is used to offset the year 2008 net gains,then $5,000 of the year 2009 net gains.

Question 17

What are some of the advantages and disadvantages of filing a consolidated return?

Accepted Answer

The answer of What are some of the advantages and...

Question 18

The dividends-received deduction is designed to reduce double taxation of corporate dividends payable to individual shareholders.

Accepted Answer

A) True 
 B)False

Question 19

Identify which of the following statements is true.

Accepted Answer

A) A corporate NOL can be carried back two years and forward 15 years. 
B) An election to forgo an NOL carryback must be made on or before the return due date (including extensions)for the year in which the NOL is incurred. 
C) In computing an NOL for the current year,a deduction is allowed for NOLs from previous years. 
D) All of the above are false. 
A) A corporate NOL can be carried back two years and forward 15 years. 
B) An election to forgo an NOL carryback must be made on or before the return due date (including extensions)for the year in which the NOL is incurred. 
C) In computing an NOL for the current year,a deduction is allowed for NOLs from previous years. 
D) All of the above are false.

Question 20

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

Island Corporation has the following income and expense items for the year: The taxable income of Island Corporation is

Andy owns 20% of North Corporation and 60% of Tent Corporation.North and Tent have only one class of stock outstanding.Barbara owns 50% of North Corporation and 20% of Tent Corporation.North and Tent Corporations will be brother-sister corporations if

Access Corporation,a large manufacturer,has a taxable income of $16,000,000.Access Corporation's tax is

A new corporation may generally select one of the following accounting methods with the exception of

Miller Corporation has gross income of $100,000,which includes $40,000 of dividends from a 10%-owned corporation.In addition,Miller has $80,000 of expenses.Miller's taxable income or loss is

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?

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?

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

Identify which of the following statements is true.

Trail Corporation has gross profits on sales of $140,000 and deductible expenses of $180,000.In addition,Trail has a net capital gain of $60,000.Trail's taxable income is

Blueboy Inc.contributes inventory to a qualified charity for use in feeding the needy.The inventory has a $70,000 FMV and a $30,000 adjusted basis.Blueboy Inc.can take a charitable contribution deduction of

Corporate estimated tax payments are due April 15,June 15,September 15,and January 15.

Evans Corporation has a $15,000 net capital loss in 2011.The corporation reported the following capital gain net income during the past three years.Identify which of the following statements is true.

What are some of the advantages and disadvantages of filing a consolidated return?

The dividends-received deduction is designed to reduce double taxation of corporate dividends payable to individual shareholders.

Identify which of the following statements is true.

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

Tax Research

Corporate Formations and Capital Structure

Corporate Nonliquidating Distributions

Other Corporate Tax Levies

Corporate Liquidating Distributions

Corporate Acquisitions and Reorganizations

Consolidated Tax Returns

Partnership Formation and Operation

Special Partnership Issues

US Corporations

The Gift Tax

The Estate Tax

Income Taxation of Trusts and Estates

Administrative Procedures

Us Taxation of Foreign-Related Transactions

Filters

Exam 3: The Corporate Income Tax

Island Corporation has the following income and expense items for the year: The taxable income of Island Corporation is

Andy owns 20% of North Corporation and 60% of Tent Corporation.North and Tent have only one class of stock outstanding.Barbara owns 50% of North Corporation and 20% of Tent Corporation.North and Tent Corporations will be brother-sister corporations if

Access Corporation,a large manufacturer,has a taxable income of $16,000,000.Access Corporation's tax is

A new corporation may generally select one of the following accounting methods with the exception of

Miller Corporation has gross income of $100,000,which includes $40,000 of dividends from a 10%-owned corporation.In addition,Miller has $80,000 of expenses.Miller's taxable income or loss is

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?

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?

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

Identify which of the following statements is true.

Trail Corporation has gross profits on sales of $140,000 and deductible expenses of $180,000.In addition,Trail has a net capital gain of $60,000.Trail's taxable income is

Blueboy Inc.contributes inventory to a qualified charity for use in feeding the needy.The inventory has a $70,000 FMV and a $30,000 adjusted basis.Blueboy Inc.can take a charitable contribution deduction of

Corporate estimated tax payments are due April 15,June 15,September 15,and January 15.

Evans Corporation has a $15,000 net capital loss in 2011.The corporation reported the following capital gain net income during the past three years.Identify which of the following statements is true.

What are some of the advantages and disadvantages of filing a consolidated return?

The dividends-received deduction is designed to reduce double taxation of corporate dividends payable to individual shareholders.

Identify which of the following statements is true.

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

Tax Research

Corporate Formations and Capital Structure

Corporate Nonliquidating Distributions

Other Corporate Tax Levies

Corporate Liquidating Distributions

Corporate Acquisitions and Reorganizations

Consolidated Tax Returns

Partnership Formation and Operation

Special Partnership Issues

US Corporations

The Gift Tax

The Estate Tax

Income Taxation of Trusts and Estates

Administrative Procedures

Us Taxation of Foreign-Related Transactions

Filters