ACC 575 ACC575 Week 8 Quiz

ACC 575 ACC575 Week 8 Quiz

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ACC 575 Week 8 Quiz

1.

Clark and Hunt organized Jet Corp. with authorized voting common stock of $400,000. Clark contributed $60,000 cash. 

Both Clark and Hunt transferred other property in exchange for Jet stock as follows:

2. 

The following information pertains to Dahl Corp.:

3.

The following information pertains to Lamb Corp.:

4. 

In 2009, Garland Corp. contributed $40,000 to a qualified charitable organization. Garland's 2009 taxable income before the deduction for charitable contributions was $410,000. Included in that amount is a $20,000 dividends-received deduction. Garland also had carryover contributions of $5,000 from the prior year.

5.

Eastern Corp., a calendar year corporation, was formed January 3, 2007, and on that date placed five-year property in service. The property was depreciated under the general MACRS system. Eastern did not elect to use the straight-line method.

The following information pertains to Eastern:

6.

Which of the following tax credits cannot be claimed by a corporation?

7. 

In a type B reorganization, as defined by the Internal Revenue Code, the

8. 

Potter Corp. and Sly Corp. file consolidated tax returns. 

In January 2008, Potter sold land, with a basis of $60,000 and a fair value of $75,000, to Sly for $100,000. Sly sold the land in December 2009 for $125,000.

9. 

On January 2 of the current year, Shaw Corp., an accrual-basis, calendar-year C corporation, purchased all the assets of a sole proprietorship, including $300,000 in goodwill. Current-year federal income tax expense of $110,100, and $7,500 for annual amortization of goodwill based on a 40-year amortization period, were deducted to arrive at Shaw's reported book income of $239,200.

10. 

Tan Corporation calculated the following taxes for the year:

11. 

In 2009, Acorn Inc. had the following items of income and expense:

12.

Page Corp. owns 80% of Saga Corp.'s outstanding capital stock. Saga's capital stock consists of 50,000 shares of common stock issued and outstanding. Saga's 2009 net income was $70,000.

 

 

During 2009, Saga declared and paid dividends of $30,000. In conformity with general accepted accounting principles, Page recorded the following entries in 2009:

13. 

The costs of organizing a corporation

14. 

Mr. and Mrs. Sloan incurred the following expenses on December 15, 2009, when they adopted a child:

15. 

For the year ended December 31, 2009, Maple Corp.'s book income, before federal income tax, was $100,000. Included in this $100,000 were the following:

16. 

Krol Corp. distributed marketable securities in redemption of its stock in a complete liquidation. 

On the date of distribution, these securities had a basis of $100,000 and a fair market value of $150,000.

17. 

Mintee Corp., an accrual-basis calendar-year C Corporation, had no corporate shareholders when it liquidated. In cancellation of all their Mintee stock, each Mintee shareholder, a liquidating distribution of $2,000 cash and land with a tax basis of $5,000 and a fair market value of $10,500. 

Before the distribution, each shareholder's tax basis in Mintee stock was $6,500.

18. 

Wallace purchased 500 shares of Kingpin, Inc., 15 years ago for $25,000. Wallace has worked as an owner/employee and owned 40% of the company throughout this time. This year, Kingpin, which is not an S corporation, redeemed 100% of Wallace's stock for $200,000.

19.

Dart Corp., a calendar year domestic C corporation, is not a personal holding company. For purposes of the accumulated earnings tax, Dart has accumulated taxable income for 2009. Which step(s) can Dart take to eliminate or reduce any 2009 accumulated earnings tax?

20.

At the beginning of 2009, Cable, a C corporation, had accumulated earnings and profits of $100,000. Cable reported the following items on its current-year tax return:


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