AC 507 AC507 Unit 1 Quiz (Kaplan University)

AC 507 Unit 1 Quiz (Kaplan University)

1. What is the gain or loss on the sale of an asset for $68,000 if the asset cost $185,000, depreciation expense deducted was $124,000, and there was a $19,000 major addition to the asset?
2. What is George’s gross income if he has the following: Salary = $78,000; Dividends = $4,000; interest on city of San Francisco bonds = $2,000; a gain of $14,000 on a stock sale and a $4,000 loss on a small sole proprietorship that he owns.
3. What is the marginal tax rate for a corporation with $110,000 of taxable income?
4. Which of the following business entities has no provision that limits some or all of the liability of the owner?
5. Terri owns a 50 percent interest in the TT Partnership. At the beginning of the year, her basis in her partnership interest was $75,000. The partnership reports a $40,000 loss for the year and distributes $4,000 cash to Terri. What is her basis in her partnership interest at the end of the year?
6. Which of the following is not a characteristic of an S corporation?
7. Crystal invested $8,000 cash in CRK Partnership for a 30% general partnership interest. In its first year of operations, CRK lost $15,000. In its second year of operations, CRK lost an additional $14,000. How much of the second year’s losses can Crystal deduct in that year?
8. Hoku Corporation (a C corporation) had the following history of income and loss:
9. Which of the following is not a tax credit allowed a corporation?
10. Which of the following business entities does not file a separate tax return to report business operations?