Question 1

Which of the following items is not generally a schedule M-1 adjustment?

Accepted Answer

A) Net capital losses 
B) Interest on tax-exempt bonds 
C) Federal income tax expense 
D) Interest expense on a loan to purchase municipal bonds 
E) All of the above are M-1 adjustments 
A) Net capital losses 
B) Interest on tax-exempt bonds 
C) Federal income tax expense 
D) Interest expense on a loan to purchase municipal bonds 
E) All of the above are M-1 adjustments

Question 2

Which of the following companies is taxed at a flat rate of 35 percent?

Accepted Answer

A) An auto parts manufacturing corporation with taxable income of $73,000. 
B) A consulting corporation of owner-employee CPAs with taxable income of $1,000,000. 
C) A family-owned shoe store with earnings of $224,000 in 2017. 
D) All of the above are taxed at a flat rate of 35 percent. 
A) An auto parts manufacturing corporation with taxable income of $73,000. 
B) A consulting corporation of owner-employee CPAs with taxable income of $1,000,000. 
C) A family-owned shoe store with earnings of $224,000 in 2017. 
D) All of the above are taxed at a flat rate of 35 percent.

Question 3

If a corporation is unable to deduct a capital loss against capital gains for a particular tax year,it loses the tax benefit since the loss may not be carried to other tax years.

Accepted Answer

A) True 
 B)False

Question 4

In 2017,Apricot Corporation had taxable income of $120,000.Included in taxable income was a $10,000 capital gain.The $120,000 of taxable income does not include a $15,000 capital loss carryforward available from the previous year.What is Apricot Corporation's 2017 income tax liability before any tax credits?

Accepted Answer

A) $24,200 
B) $26,150 
C) $28,550 
D) $30,050 
E) None of the above 
A) $24,200 
B) $26,150 
C) $28,550 
D) $30,050 
E) None of the above

Question 5

Which of the following statements is true of corporations?

Accepted Answer

A) Income of all corporations is taxed in the same way that income of partnerships is taxed. 
B) A corporation's charitable contribution deduction is limited to 25 percent of the corporation's taxable income. 
C) Capital losses of a corporation may be deducted from ordinary income,subject to an annual limitation. 
D) If a corporation has a long-term capital loss that is carried back,it is treated as a short-term capital loss. 
E) A corporation may deduct organizational expenditures as they are incurred. 
A) Income of all corporations is taxed in the same way that income of partnerships is taxed. 
B) A corporation's charitable contribution deduction is limited to 25 percent of the corporation's taxable income. 
C) Capital losses of a corporation may be deducted from ordinary income,subject to an annual limitation. 
D) If a corporation has a long-term capital loss that is carried back,it is treated as a short-term capital loss. 
E) A corporation may deduct organizational expenditures as they are incurred.

Question 6

The accumulated earnings tax will not be imposed on accumulations that can be shown to be necessary to meet the reasonable needs of the business.

Accepted Answer

A) True 
 B)False

Question 7

Fran,George,and Helen form FGH Corporation.In exchange for 300 shares of stock of the corporation,Fran contributes property with a basis of $15,000,fair market value of $50,000 and subject to a liability of $20,000 which the corporation assumed.George contributes property with a basis of $20,000,fair market value of $30,000 in exchange for 250 shares of stock of the corporation with a value of $25,000 plus $5,000 cash.Helen performs services for the corporation and receives $2,000 worth of stock (20 shares)in exchange for the services.
a.What is the amount of Fran's recognized gain or loss on the transaction?
b.What is Fran's basis in the stock of the corporation?
c.What is the corporation's basis in the property received from Fran?
d.What is the amount of George's recognized gain or loss on the transaction?
e.What is George's basis in the stock of the corporation?

Accepted Answer

The answer of Fran,George,and Helen form FGH Corporation.In exchange for...

Question 8

The accumulated earnings tax is designed to prevent shareholders from avoiding tax at the shareholder level.

Accepted Answer

A) True 
 B)False

Question 9

The Great Gumball Corporation is a gumball producer.The corporation has accumulated earnings of $425,000 and it can establish a reasonable need for $360,000.Calculate the amount of the accumulated earnings tax,if any,that will be imposed on the corporation.

Accepted Answer

$13,000 =

Question 10

If a corporation's status as an S corporation is involuntarily terminated in the middle of the tax year,the corporation must file an S corporation tax return for the first half of the tax year and a regular corporation tax return for the second half of the tax year.

Accepted Answer

A) True 
 B)False

Question 11

The corporate tax rates favor large corporations.

Accepted Answer

A) True 
 B)False

Question 12

Corporations pay a flat 30 percent federal income tax.

Accepted Answer

A) True 
 B)False

Question 13

For the year ended December 31,2017,Prunus,Inc. ,reported net income before federal income tax expense of $800,000 per the corporation's books.This figure included the following items: What is the taxable income of Prunus,Inc.for 2017?

Accepted Answer

A) $800,000 
B) $820,000 
C) $830,000 
D) $870,000 
E) None of the above 
A) $800,000 
B) $820,000 
C) $830,000 
D) $870,000 
E) None of the above

Question 14

Calculate the corporate tax liability in each of the following circumstances:
a.X Corporation has taxable income of $250,000 for its current calendar tax year.
b.Y Corporation has $1,600,000 in taxable income for the current tax year.
c.​Z Corporation has taxable income of $100,000,before capital gains and losses,a short-term capital loss of $30,000,and a long-term capital gain of $10,000 in the current tax year.

Accepted Answer

The answer of Calculate the corporate tax liability in each...

Question 15

Ficus,Inc.began business on March 1,2017,and elected to file its income tax return on a calendar-year basis.The corporation incurred $800 in organizational expenditures.Assuming the corporation does not elect to expense but chooses to amortize the costs over 180 months,the maximum allowable deduction for amortization of organizational expenditures in 2017 is:

Accepted Answer

A) $4.44 
B) $44.44 
C) $53.28 
D) $800.00 
E) None of the above 
A) $4.44 
B) $44.44 
C) $53.28 
D) $800.00 
E) None of the above

Question 16

Schedule M-1 on Form 1120 shows the reconciliation of a corporation's tax liability to the tax expense on the corporation's books.

Accepted Answer

A) True 
 B)False

Question 17

During the current year,The Jupiter Company,which is an S corporation,had the following items of income and expenses:
​
   
a.Calculate the net ordinary income.
b.List all the other items which must be separately reported.
c.If the S corporation is on a calendar year,when is the corporation's tax return due?

Accepted Answer

The answer of During the current year,The Jupiter Company,which is...

Question 18

Which of the following is false in regards to filing requirements?

Accepted Answer

A) Corporations file their tax returns on Form 1120. 
B) An automatic 6-month extension can be obtained by a corporation that files Form 1120. 
C) Filing an extension for a corporate tax return also provides an extension for paying the corporation's tax due.A corporation can wait to pay its tax liability without penalty when the return is filed. 
D) None of the above is false. 
A) Corporations file their tax returns on Form 1120. 
B) An automatic 6-month extension can be obtained by a corporation that files Form 1120. 
C) Filing an extension for a corporate tax return also provides an extension for paying the corporation's tax due.A corporation can wait to pay its tax liability without penalty when the return is filed. 
D) None of the above is false.

Question 19

A corporation must reconcile,to the IRS's satisfaction,the differences between net income as shown on the company's books and taxable income (before special deductions and net operating losses)as shown on the tax return.

Accepted Answer

A) True 
 B)False

Question 20

If the shareholders of an S corporation voluntarily revoke the corporation's S corporation status in the sixth month of the tax year and the revocation does not specify a prospective revocation date,the corporation is a regular corporation for that tax year.

Accepted Answer

A) True 
 B)False

Which of the following items is not generally a schedule M-1 adjustment?

Which of the following companies is taxed at a flat rate of 35 percent?

If a corporation is unable to deduct a capital loss against capital gains for a particular tax year,it loses the tax benefit since the loss may not be carried to other tax years.

Which of the following statements is true of corporations?

The accumulated earnings tax will not be imposed on accumulations that can be shown to be necessary to meet the reasonable needs of the business.

The accumulated earnings tax is designed to prevent shareholders from avoiding tax at the shareholder level.

The Great Gumball Corporation is a gumball producer.The corporation has accumulated earnings of $425,000 and it can establish a reasonable need for $360,000.Calculate the amount of the accumulated earnings tax,if any,that will be imposed on the corporation.

If a corporation's status as an S corporation is involuntarily terminated in the middle of the tax year,the corporation must file an S corporation tax return for the first half of the tax year and a regular corporation tax return for the second half of the tax year.

The corporate tax rates favor large corporations.

Corporations pay a flat 30 percent federal income tax.

For the year ended December 31,2017,Prunus,Inc. ,reported net income before federal income tax expense of $800,000 per the corporation's books.This figure included the following items: What is the taxable income of Prunus,Inc.for 2017?

Schedule M-1 on Form 1120 shows the reconciliation of a corporation's tax liability to the tax expense on the corporation's books.

Which of the following is false in regards to filing requirements?

A corporation must reconcile,to the IRS's satisfaction,the differences between net income as shown on the company's books and taxable income (before special deductions and net operating losses)as shown on the tax return.

If the shareholders of an S corporation voluntarily revoke the corporation's S corporation status in the sixth month of the tax year and the revocation does not specify a prospective revocation date,the corporation is a regular corporation for that tax year.

The Individual Income Tax Return

Gross Income and Exclusions

Business Income and Expenses Part I

Business Income and Expenses Part II

Itemized Deductions and Other Incentives

Credits and Special Taxes

Accounting Periods and Methods and Depreciation

Capital Gains and Losses

Withholding Estimated Payments and Payroll Taxes

Partnership Taxation

Tax Administration and Tax Planning

Filters

Exam 11: The Corporate Income Tax

Which of the following items is not generally a schedule M-1 adjustment?

Which of the following companies is taxed at a flat rate of 35 percent?

If a corporation is unable to deduct a capital loss against capital gains for a particular tax year,it loses the tax benefit since the loss may not be carried to other tax years.

Which of the following statements is true of corporations?

The accumulated earnings tax will not be imposed on accumulations that can be shown to be necessary to meet the reasonable needs of the business.

The accumulated earnings tax is designed to prevent shareholders from avoiding tax at the shareholder level.

The Great Gumball Corporation is a gumball producer.The corporation has accumulated earnings of $425,000 and it can establish a reasonable need for $360,000.Calculate the amount of the accumulated earnings tax,if any,that will be imposed on the corporation.

If a corporation's status as an S corporation is involuntarily terminated in the middle of the tax year,the corporation must file an S corporation tax return for the first half of the tax year and a regular corporation tax return for the second half of the tax year.

The corporate tax rates favor large corporations.

Corporations pay a flat 30 percent federal income tax.

For the year ended December 31,2017,Prunus,Inc. ,reported net income before federal income tax expense of $800,000 per the corporation's books.This figure included the following items: What is the taxable income of Prunus,Inc.for 2017?

Schedule M-1 on Form 1120 shows the reconciliation of a corporation's tax liability to the tax expense on the corporation's books.

Which of the following is false in regards to filing requirements?

A corporation must reconcile,to the IRS's satisfaction,the differences between net income as shown on the company's books and taxable income (before special deductions and net operating losses)as shown on the tax return.

If the shareholders of an S corporation voluntarily revoke the corporation's S corporation status in the sixth month of the tax year and the revocation does not specify a prospective revocation date,the corporation is a regular corporation for that tax year.

The Individual Income Tax Return

Gross Income and Exclusions

Business Income and Expenses Part I

Business Income and Expenses Part II

Itemized Deductions and Other Incentives

Credits and Special Taxes

Accounting Periods and Methods and Depreciation

Capital Gains and Losses

Withholding Estimated Payments and Payroll Taxes

Partnership Taxation

Tax Administration and Tax Planning

Filters