Abbot Corporation reported a net operating loss of $400,000 in 20X3, which the corporation elected to carryforward to 20X4. Included in the computation of the loss was regular depreciation of $100,000 (E&P depreciation is $40,000), first year expensing under §179 of $50,000, and a dividends received deduction of $10,000. The corporation's current earnings and profits for 20X3 would be: A. $520,000 B. $510,000 C. $340,000 D. $420,000

Abbot Corporation reported a net operating loss of $400,000 in 20X3, which the corporation elected to carryforward to 20X4. Included in the computation of the loss was regular depreciation of $100,000 (E&P depreciation is $40,000), first year expensing under §179 of $50,000, and a dividends received deduction of $10,000. The corporation's current earnings and profits for 20X3 would be: A. $520,000 B. $510,000 C. $340,000 D. $420,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Mallow Incorporated, which has a 21% tax rate, purchased a new business asset. First-year book depreciation was $37,225, and first-year MACRS depreciation was $55,025. As a result of this book/tax difference, Mallow recorded a $3,738 deferred tax asset. True or False True False
Company’s reported current year profit is Rs. 70000 after incorporating the following:ParticularsAmountParticularsAmount Loss on Sale of Equipment9000Gain from sale of Assets40000 Premium on Redemption of Debentures1500Provision for Tax22000 Discount on issue of Debentures2000Dividend Income4000 Depreciation on Machinery20000Transfer to General Reserve5000 Depletion of Natural Resources10000Preliminary Expenses1000 Interim Dividend25000Profit on Revaluation2500 Loss on sale of Investment1000 Find out the Funds from Operations.
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None
Bourne Guitars, a corporation, reported a $157,000 net §1231 gain for year 6 1.) Assuming Bourne reported $50,000 of nonrecaptured net §1231 losses during years 1–5, what amount of Bourne’s net §1231 gain for year 6, if any, is treated as ordinary income? 2.) Assuming Bourne’s nonrecaptured net §1231 losses from years 1–5 were $200,000, what amount of Bourne’s net §1231 gain for year 6, if any, is treated as ordinary income?
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