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Exam 5: The Corporate Income Tax

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Question 1

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The dividends-received deduction is designed to reduce double taxation of corporate dividends payable to individual shareholders.

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Question 2

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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?

A) $24,600
B) $28,000
C) $31,400
D) $35,000

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Question 3

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Dumont Corporation reports the following results in the current year: What is Dumont's taxable income?

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: What is the maximum amount of organizational expenditures that can be deducted by the corporation for its first tax year ending November 30?

Super Corporation gives a painting to a museum for public display on August 6.The painting was purchased on April 3 of the same year for $20,000 and is worth $30,000 at the date of gift.Also,Super accrues a charitable contribution on December 30 and pays the $12,000 contribution on February 1 of the next year.Super Corporation is a calendar-year corporation that uses the accrual method of accounting.Before considering the 10% limitation rule,the maximum deduction for the current year is

Davis Corporation,a manufacturer,has taxable income of $150,000.Davis's regular tax liability is

Chase Corporation reports the following results in the current year: What is Chase's taxable income?

In 2011,Summer Corporation earns domestic gross receipts of $2 million and incurs allocable expenses of $800,000.It has $400,000 of income from other sources,resulting in taxable income of $1.6 million before the U.S.production activities deduction.What is its U.S.production activities deduction?

Two days before the ex-dividend date,Drexel Corporation buys 100 shares of Zebra Corporation stock (less than 1%) for $200,000.Drexel Corporation receives $10,000 of dividends from Zebra Corporation.Two weeks after the ex-dividend date,Drexel Corporation sells the Zebra Corporation stock for $190,000.Which of the following statements is correct?

Junod Corporation's book income is $500,000.What tax issues must be addressed in determining taxable income?

Identify which of the following statements is true.

Blueboy Inc.contributes inventory to a qualified charity for use in feeding the needy.The inventory has a $70,000 FMV and a $30,000 adjusted basis.Blueboy Inc.can take a charitable contribution deduction of

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

Booth Corporation sells a building classified as a residential rental property for $200,000.The MACRS straight-line depreciation taken is $20,000 and the adjusted basis of the building is $170,000.Booth Corporation must recognize ordinary income of

Which of the following types of evidence indicate that a valuation allowance is needed to reduce the deferred tax asset?

Courtney Corporation had the following income and expenses for the tax year: Dividends received from less-than-20%- Courtney had taxable income for the past three years of: a)Determine the corporation's NOL for the current year. b)Determine the amount of NOL carried back to each preceding tax year and the amount of NOL,if any,available as a carryforward.

The following expenses are incurred by Salter Corporation when it is organized on July 1: Salter commenced business on September 8.What is the maximum amount of organizational expenditures that can be deducted by the corporation for its first tax year ending December 31?

Miller Corporation has gross income of $100,000,which includes $40,000 of dividends from a 10%-owned corporation.In addition,Miller has $80,000 of expenses.Miller's taxable income or loss is

Bebop Corporation reports the following results in the current year: What is Bebop's taxable income?

What are start-up expenditures?