ACC 455 ACC455 Final Exam 2 Answers (PHOENIX)
ACC 455 Final Exam
1) Regulations are:
2) Identify which of the following statements is false.
3) Which of the following statements regarding proposed regulations is not correct?
4) Which of the following statements about a partnership is true?
5) Which of the following is an advantage of a sole proprietorship over other business forms?
6) Which of the following statements is incorrect?
7) Three members form an LLC in the current year. Which of the following statements is incorrect?
8) Identify which of the following statements is true.
9) Identify which of the following statements is false.
10) Barry, Dan, and Edith together form a new corporation; Barry and Dan each contribute property in exchange for stock. Within 2 weeks after the formation, the corporation issues additional stock to Edith in exchange for property. Barry and Dan each hold 10,000 shares and Edith will receive 9,000 shares. Which transactions will qualify for no recognition?
11) Matt and Sheila form Krupp Corporation. Matt contributes property with a FMV of $55,000 and a basis of $35,000. Sheila contributes property with a FMV of $75,000 and a basis of $40,000. Matt sells his stock to Paul shortly after the exchange. The transaction will
12) Identify which of the following statements is true.
13) Identify which of the following statements is false.
14) Identify which of the following statements is true.
15) Identify which of the following statements is true.
16) 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
17) Richards Corporation has taxable income of $280,000 calculated before the charitable contribution deduction and before its dividends-received deduction of $34,000. Richards makes cash contributions of $35,000 to charitable organizations. What is Richards Corporation's charitable contribution deduction for the current year?
18) Edison Corporation is organized on July 31. The corporation starts business on August 10. The corporation adopts a November 30 fiscal year end. The following expenses are incurred during the year:
19) Which of the following items are tax preference items for purposes of arriving at alternative minimum taxable income?
20) Which of the following is not an adjustment in calculating AMTI?
21) When computing a corporation's alternative minimum taxable income, its taxable income is
22) Boxer Corporation buys equipment in January of the current year with a 7-year class life for $15,000. The corporation expensed the $15,000 under Sec. 179. The deduction in the year of purchase for E&P purposes due to the acquisition and expensing of the equipment is
23) For purposes of determining current E&P, which of the following items cannot be deducted in the year incurred?
24) identify which of the following increases Earnings & Profits.
25) Identify which of the following statements is true.
26) Poppy Corporation was formed 3 years ago. Poppy's E&P history is as follows:
27) Identify which of the following statements is true.
28) Hogg Corporation distributes $30,000 to its sole shareholder, Ima,s. At the time of the distribution, Hoggs' E&P is $14,000 and Ima's basis in her stock is $10,000. Ima's gain from this transaction is
29) Wills Corporation, which has accumulated and current E&P totaling $65,000, distributes land to its sole shareholder, an individual. The land has a FMV of $75,000 and an adjusted basis of $55,000. The shareholder assumes a $15,000 liability associated with the land. The shareholder will recognize
30) Crossroads Corporation distributes $60,000 to its sole shareholder Harley. Crossroads has earnings and profits of $55,000 and Harley's basis in her stock is $20,000. After the distribution, Harley's basis is
31) Joshua owns 100% of Steeler Corporation's stock. Joshua's basis in the stock is $8,000. Steeler Corporation has E&P of $40,000. If Steeler Corporation redeems 60% of Joshua's stock for $50,000, Joshua must report dividend income of
32) Which of the following is not a reason for a stock redemption?
33) Which of the following is not a condition that permits a stock redemption to be treated as a sale?
34) The definition of a partnership does not include
35) Identify which of the following statements is true.
36) Which one of the following individuals or entities is ineligible to be an S corporation shareholder?
38) In computing the ordinary income of a partnership, a deduction is allowed for
39) Cactus Corporation, an S Corporation, had accumulated earnings and profits of $100,000 at the beginning of 2008. Tex and Shirley each own 50% of the stock. Cactus does not make any distributions during 2008, but had $200,000 of ordinary income. In 2009, ordinary income was $100,000 and distributions were $100,000. What is Tex's ordinary income for 2009?
41) On the first day of the partnership's tax year, Karen purchases a 50% interest in a general partnership for $30,000 cash and she materially participates in the operation of the partnership for the entire year. The partnership has $40,000 in recourse liabilities when Karen enters the partnership. Partners share the economic risk of loss from recourse liabilities in the same way they share partnership losses. There is no minimum gain related to the nonrecourse liability. During the year the partnership incurs a $120,000 loss and a $20,000 increase in liabilities. How much of the loss can Karen report on her tax return for the current year?
42) George pays $10,000 for a 20% interest in a general partnership which has recourse liabilities of $20,000. The partners share the economic risk of loss from recourse liabilities in the same way they share partnership losses. George's basis in his partnership interest is
48) On June 30 of the current year, the S election of Great Corporation is terminated thus creating a 6-month S short year and a 6-month C short year. Great Corporation is a calendar-year taxpayer. The S short year return is due
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