FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 16: Corporate Operations

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 21

Essay

Review LaterAdd Note

Review Later

In 2019,Webtel Corporation donated $50,000 to a qualifying charity.For the year,it reported taxable income of $310,000,which included the following: the $50,000 charitable contribution (before limitation),a $100,000 dividends received deduction,and a $20,000 net operating loss carryover.What is Webtel Corp.'s charitable contribution deduction?

Correct Answer

verified

$46,000,co...

View Answer

Show Answer

Question 22

Multiple Choice

Review LaterAdd Note

Review Later

Which of the following does NOT create a permanent book-tax difference?

A) Organizational and start-up expenses.
B) Key employee death benefit income.
C) Fines and penalties expenses.
D) Municipal bond interest income.

E) A) and B)
F) B) and D)

Correct Answer

verified

Show Answer

Question 23

True/False

Review LaterAdd Note

Corporations compute their dividends received deduction by multiplying the dividend amount by 10 percent,50 percent,or 100 percent,depending on their ownership in the distributing corporation's stock.

AmStore Inc.sold some of its heavy machinery at a gain.AmStore used the straight-line method for financial accounting depreciation and expensing for tax cost recovery.If accumulated depreciation for financial accounting purposes is less than accumulated depreciation for tax reporting purposes,what is the nature of the book-tax difference associated with the gain on the sale?

Corporation A receives a dividend from Corporation B.It includes the dividend in gross income for tax purposes but includes a pro-rata portion of B's earnings in its financial accounting income.If A has accounted for the dividend correctly (using the general rule) ,how much of B's stock does A own?

In 2019,AutoUSA Inc.reported $4,600,000 of book income,including $20,000 of interest income from tax-exempt bonds.AutoUSA reported $3,600,000 of regular business expenses.If it made $210,000 of estimated tax payments (prepayments)throughout the tax year,what is its tax due or tax refund when it files its return?

Which of the following statements regarding charitable contributions is false?

GenerUs Inc.'s board of directors approved a charitable cash contribution to FoodBank,a qualified nonprofit organization,in November of 2019.GenerUs made the payment to FoodBank on February 2,2020.GenerUs Inc.(a calendar-year corporation)may claim a deduction for the contribution on its 2019 tax return.

Which of the following is allowable as a deduction in calculating a corporation's net operating loss?

iScope Inc.paid $3,000 in interest on a loan it used to purchase municipal bonds.What is the nature of the book-tax difference relating to this expense?

Income that is included in book income,but excluded from taxable income,results in a favorable,permanent book-tax difference.

Bingo Corporation incurred a $10 million net operating loss in 2019.Bingo reported taxable income of $12 million in 2020.Bingo can offset the entire $10 million NOL carryover against taxable income in 2020.

Tatoo Inc.reported a net capital loss of $13,000 in 2019.The company had a net capital gain of $4,300 in 2017 and $3,000 in 2016.In 2018,although the company suffered a net operating loss,it had net capital gains of $1,000.What is the amount of Tatoo's capital loss carryover remaining after it applies the carryback?

Corporations may carry excess charitable contributions forward five years,but they may not carry them back.

Which of the following statements regarding capital gains and losses is false?

A corporation may carry a net capital loss back three years and forward five years.

Which of the following describes the correct treatment of incentive stock options (ISOs) ?

Although a corporation may report a temporary book-tax difference for an item of income or deduction for a given year,over the long term the total amount of income or deduction it reports with respect to that item will be the same for both book and tax purposes.

For 2019,accrual-method corporations cannot deduct charitable contributions until they actually make payment to the charity.

In January 2019,Khors Company issued nonqualified stock options to its CEO,Jenny Svaro.Because the company does not expect Ms.Svaro to leave the company,the options vest at the time they are granted with a total value of $50,000.In December of 2019,the company experienced a surge in its stock price,and Ms.Svaro exercises the options.The total bargain element at the time of exercise is $40,000.For 2019,what is the nature of the book-tax difference due to the options exercised?