Please answer the MC questions to the best of your knowledge. another chance for those did...
Please answer the MC questions to the best of your knowledge. another chance for those did not participate in previous questions.
1. Corporation P files a consolidated return with Corporation S. In preparing a consolidated return, their accountant finds the following:
P S
Separate taxable income (loss) $500,000 ($200,000)
Capital gain (loss) ($25,000) $50,000
Charitable contributions $20,000 $10,000
Dividend from S $10,000
What is the consolidated return taxable income?
a. $365,000
b. $295,000
c. $280,000
d. $315,000
2. Jude received a $25,000 distribution from BC Corporation that
the corporation identified as $15,000 dividend and $10,000 return
of capital. What effect does this distribution have on Jude’s
taxable income if his basis in the stock of BC is $8,000?
a. Increase of $25,000
b. Increase of $17,000
c. Increase of $15,000
d. Increase of $10,000
3. Borneo Corporation has $21,000 in current earnings and
profits and $5,000 of accumulated earnings and profits. Borneo
distributes $20,000 of income to its shareholders on June 15 and
another $10,000 on December 15. How much of the December 15
distribution is taxable as a dividend?
a. $21,000
b. $10,000
c. $7,000
d. $5,000
4. Which of the following is not a positive adjustment to
taxable income to determine current earnings and profits?
a. Federal income taxes paid
b. Proceeds of life insurance
c. Capital loss carryovers
d. Dividend received deduction
5. What is JJ Corporation’s balance in accumulated earnings and
profits at the beginning of year 2 if in year 1 it made a $40,000
distribution to its shareholders, its current earnings and profits
was $35,000, and its accumulated earnings and profits was $25,000
at the beginning of year 1?
a. $65,000
b. $30,000
c. $25,000
d. $20,000
6. A corporation owns 90 percent of the voting power of a second
corporation but only 70 percent of its total stock value. The
corporations are:
a. Affiliated
b. A controlled group
c. Brother-sister corporations
d. Consolidated group
7. What is the minimum number of individuals who must own a
corporation to have it avoid meeting the personal holding company
designation?
a. One
b. Five
c. Nine
d. Ten
8. Which of the following is an indication of the accumulation
of earnings and profits beyond the reasonable needs of the
business?
a. A $200,000 earnings and profits balance
b. $200,000 accumulated to retire debt
c. $600,000 accumulated for shareholder loans
d. $12,000,000 accumulated to expand operating facilities
Homework Answers
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Please answer the MC questions to the best of your knowledge.
another chance for those did...
1. Corporation P files a consolidated return with Corporation S. In preparing a consolidated return, their ...
1. Corporation P files a consolidated return with Corporation S. In preparing a consolidated return, their accountant finds the following: P S Separate taxable income (loss) $500,000 ($200,000) Capital gain (loss) ($25,000) $50,000 Charitable contributions $20,000 $10,000 Dividend from S $10,000 What is the consolidated return taxable income? a. $365,000 b. $295,000 c. $280,000 d. $315,000 2. Jude received a $25,000 distribution from BC Corporation that the corporation identified as $15,000 dividend and $10,000 return of capital. What effect does...
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