Corporation is owned 40 percent by Bill, 35 percent by Jack, and 25 percent by Teresa. Bill and Jack are father and son. What is Jack’s total direct and indirect ownership under Section 267?A.65 percentB.None of the aboveC.35 percentD.75 percentE.40 percent rQUESTION 3E Corporation is a sub chapter S corporation owned by three individuals with calendar year-ends. The corporation sells a sports drink as its principal product and has similar sales each month. What ooptions does E Corporation have in choosing a tax year?A.E Corporation may choose an October, November, or December tax year-end.B.E Corporation may choose any month end as its tax year.C.Because the owners of E Corporation have tax years ending in December, E Corporation must also choose a December year-end.D.E Corporation may choose a tax year ending in September, October, or November, but only if the corporation also makes an annual cash deposit and adjusts the amount every year depending on the income deffered. QUESTION 4Employers must file a quarterly tax return showing the amount of wages paid and the amount of income tax and FICA tax withholding due. This tax return is filed on:A.Schedule HB.Form 941C.Schedule SED.Form 944 or Form 9455 QUESTION 5Income and loss from which of the following entities is passed through and taxed on the individual’s personal tax returns?A.S corporationB.Neither of the aboveC.Each of the aboveD.Partnership QUESTION 6Pekoe sold stock to Rose for $13,000, its fair market value. The stock cost Pekoe $16,000 5 years ago. Also, Pekoe sold Earl (an unrelated party) stock for $6,500 that cost $7,500 3 years ago. Rose and Pekoe are brother and sister. What is Pekoe’s recognized loss?A.$3,000B.$6,500C.$0D.$1,000E.$4,0005 QUESTION 7The FUTA is:A.An unemployment tax with a rate as low as 0.6 percent up to $7,000 of salary per employee.B.A disability tax with a rate of 2.9 percent up to $7,000 of salary per employee.C.An unemployment tax with a rate of 2.9 percent up to $117,000 of salary per employee.D.A disability tax with a rate of 0.6 percent p to $117,000 of salary per employee.r QUESTION 8The amortization period for Section 197 intangibles is:A.7 yearsB.40 yearsC.10 yearsD.5 yearsE.15 years QUESTION 9Which of the following amounts paid by an employer to an employee is not subject to withholding?A.BonusB.CommissionsC.All of the above are subject withholdingD.Reimbursement of expenses under an accountable planE.Salary QUESTION 10Which of the following entities is required to report on the accrual basis?A.An accounting firm operating as a Personal Service Corporation.B.All of the above corporations must report on the accrual basis.C.A corporation engaged in tropical fruit farming in Southern California.D.A manufacturing business with $15 million of gross receipts operating as a regular C corporation. QUESTION 11Which of the following forms would a lottery winner receive for her winnings?A.Form W-2GB.Form 1099-MISCC.Form 1099-RD.Form 1099-DIVE.Form W- QUESTION 12Which of the following is an acceptable method of accounting under the tax law?A.The hybrid methodB.the accrual methodC.None of the aboveD.All of the above are acceptableE.The cash method QUESTION 13Which of the following is not considered listed property for purposes of determining the taxpayer’s depreciation deduction?A.An automobile used 40 percent by an employee in providing services to his employerB.A computer used by a bank executive, on the bank premises, in performing services as an employeeC.A computer used by a taxpayer 40 percent in managing her investment portfolio and 20 percent in her business as an accountantD.None of the aboveE.A computer used exclusively by the taxpayer in managing his investment portfolio QUESTION 14Which of the following is not subject to self-employment tax?A.Gain on the sale of real estate held for investmentB.Net earnings of self-employed lawyerC.Distributive share of earnings of a partnershipD.Net earnings of the owner of a shoe storeE.Net earnings of the owner of a dry cleaner QUESTION 15Which of the following is not true about the MACRS depreciation system:A.Commercial real estate buildings are depreciated over 39 years straight-line.B.A salvage value must be determined before depreciation percentages are applied to depreciable real estate.C.Residential rental buildings are depreciated over 27.5 years straight-line.D.No matter when during the month depreciable real estate is purchased, it is considered to have been purchased at mid-month for MACRS depreciation purposes.

Corporation is owned 40 percent by Bill, 35 percent by Jack, and 25 percent by Teresa. Bill and Jack are father and son. What is Jack’s total direct and indirect ownership under Section 267?A.65 percentB.None of the aboveC.35 percentD.75 percentE.40 percent rQUESTION 3E Corporation is a sub chapter S corporation owned by three individuals with calendar year-ends. The corporation sells a sports drink as its principal product and has similar sales each month. What ooptions does E Corporation have in choosing a tax year?A.E Corporation may choose an October, November, or December tax year-end.B.E Corporation may choose any month end as its tax year.C.Because the owners of E Corporation have tax years ending in December, E Corporation must also choose a December year-end.D.E Corporation may choose a tax year ending in September, October, or November, but only if the corporation also makes an annual cash deposit and adjusts the amount every year depending on the income deffered. QUESTION 4Employers must file a quarterly tax return showing the amount of wages paid and the amount of income tax and FICA tax withholding due. This tax return is filed on:A.Schedule HB.Form 941C.Schedule SED.Form 944 or Form 9455 QUESTION 5Income and loss from which of the following entities is passed through and taxed on the individual’s personal tax returns?A.S corporationB.Neither of the aboveC.Each of the aboveD.Partnership QUESTION 6Pekoe sold stock to Rose for $13,000, its fair market value. The stock cost Pekoe $16,000 5 years ago. Also, Pekoe sold Earl (an unrelated party) stock for $6,500 that cost $7,500 3 years ago. Rose and Pekoe are brother and sister. What is Pekoe’s recognized loss?A.$3,000B.$6,500C.$0D.$1,000E.$4,0005 QUESTION 7The FUTA is:A.An unemployment tax with a rate as low as 0.6 percent up to $7,000 of salary per employee.B.A disability tax with a rate of 2.9 percent up to $7,000 of salary per employee.C.An unemployment tax with a rate of 2.9 percent up to $117,000 of salary per employee.D.A disability tax with a rate of 0.6 percent p to $117,000 of salary per employee.r QUESTION 8The amortization period for Section 197 intangibles is:A.7 yearsB.40 yearsC.10 yearsD.5 yearsE.15 years QUESTION 9Which of the following amounts paid by an employer to an employee is not subject to withholding?A.BonusB.CommissionsC.All of the above are subject withholdingD.Reimbursement of expenses under an accountable planE.Salary QUESTION 10Which of the following entities is required to report on the accrual basis?A.An accounting firm operating as a Personal Service Corporation.B.All of the above corporations must report on the accrual basis.C.A corporation engaged in tropical fruit farming in Southern California.D.A manufacturing business with $15 million of gross receipts operating as a regular C corporation. QUESTION 11Which of the following forms would a lottery winner receive for her winnings?A.Form W-2GB.Form 1099-MISCC.Form 1099-RD.Form 1099-DIVE.Form W- QUESTION 12Which of the following is an acceptable method of accounting under the tax law?A.The hybrid methodB.the accrual methodC.None of the aboveD.All of the above are acceptableE.The cash method QUESTION 13Which of the following is not considered listed property for purposes of determining the taxpayer’s depreciation deduction?A.An automobile used 40 percent by an employee in providing services to his employerB.A computer used by a bank executive, on the bank premises, in performing services as an employeeC.A computer used by a taxpayer 40 percent in managing her investment portfolio and 20 percent in her business as an accountantD.None of the aboveE.A computer used exclusively by the taxpayer in managing his investment portfolio QUESTION 14Which of the following is not subject to self-employment tax?A.Gain on the sale of real estate held for investmentB.Net earnings of self-employed lawyerC.Distributive share of earnings of a partnershipD.Net earnings of the owner of a shoe storeE.Net earnings of the owner of a dry cleaner QUESTION 15Which of the following is not true about the MACRS depreciation system:A.Commercial real estate buildings are depreciated over 39 years straight-line.B.A salvage value must be determined before depreciation percentages are applied to depreciable real estate.C.Residential rental buildings are depreciated over 27.5 years straight-line.D.No matter when during the month depreciable real estate is purchased, it is considered to have been purchased at mid-month for MACRS depreciation purposes.

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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rQUESTION 3E Corporation is a sub chapter S corporation owned by three individuals with calendar year-ends. The corporation sells a sports drink as its principal product and has similar sales each month. What ooptions does E Corporation have in choosing a tax year?A.E Corporation may choose an October, November, or December tax year-end.B.E Corporation may choose any month end as its tax year.C.Because the owners of E Corporation have tax years ending in December, E Corporation must also choose a December year-end.D.E Corporation may choose a tax year ending in September, October, or November, but only if the corporation also makes an annual cash deposit and adjusts the amount every year depending on the income deffered.

QUESTION 4Employers must file a quarterly tax return showing the amount of wages paid and the amount of income tax and FICA tax withholding due. This tax return is filed on:A.Schedule HB.Form 941C.Schedule SED.Form 944 or Form 9455

QUESTION 5Income and loss from which of the following entities is passed through and taxed on the individual’s personal tax returns?A.S corporationB.Neither of the aboveC.Each of the aboveD.Partnership

QUESTION 6Pekoe sold stock to Rose for $13,000, its fair market value. The stock cost Pekoe $16,000 5 years ago. Also, Pekoe sold Earl (an unrelated party) stock for $6,500 that cost $7,500 3 years ago. Rose and Pekoe are brother and sister. What is Pekoe’s recognized loss?A.$3,000B.$6,500C.$0D.$1,000E.$4,0005

QUESTION 7The FUTA is:A.An unemployment tax with a rate as low as 0.6 percent up to $7,000 of salary per employee.B.A disability tax with a rate of 2.9 percent up to $7,000 of salary per employee.C.An unemployment tax with a rate of 2.9 percent up to $117,000 of salary per employee.D.A disability tax with a rate of 0.6 percent p to $117,000 of salary per employee.r

QUESTION 8The amortization period for Section 197 intangibles is:A.7 yearsB.40 yearsC.10 yearsD.5 yearsE.15 years

QUESTION 9Which of the following amounts paid by an employer to an employee is not subject to withholding?A.BonusB.CommissionsC.All of the above are subject withholdingD.Reimbursement of expenses under an accountable planE.Salary

QUESTION 10Which of the following entities is required to report on the accrual basis?A.An accounting firm operating as a Personal Service Corporation.B.All of the above corporations must report on the accrual basis.C.A corporation engaged in tropical fruit farming in Southern California.D.A manufacturing business with $15 million of gross receipts operating as a regular C corporation.

QUESTION 11Which of the following forms would a lottery winner receive for her winnings?A.Form W-2GB.Form 1099-MISCC.Form 1099-RD.Form 1099-DIVE.Form W-

QUESTION 12Which of the following is an acceptable method of accounting under the tax law?A.The hybrid methodB.the accrual methodC.None of the aboveD.All of the above are acceptableE.The cash method

QUESTION 13Which of the following is not considered listed property for purposes of determining the taxpayer’s depreciation deduction?A.An automobile used 40 percent by an employee in providing services to his employerB.A computer used by a bank executive, on the bank premises, in performing services as an employeeC.A computer used by a taxpayer 40 percent in managing her investment portfolio and 20 percent in her business as an accountantD.None of the aboveE.A computer used exclusively by the taxpayer in managing his investment portfolio

QUESTION 14Which of the following is not subject to self-employment tax?A.Gain on the sale of real estate held for investmentB.Net earnings of self-employed lawyerC.Distributive share of earnings of a partnershipD.Net earnings of the owner of a shoe storeE.Net earnings of the owner of a dry cleaner

QUESTION 15Which of the following is not true about the MACRS depreciation system:A.Commercial real estate buildings are depreciated over 39 years straight-line.B.A salvage value must be determined before depreciation percentages are applied to depreciable real estate.C.Residential rental buildings are depreciated over 27.5 years straight-line.D.No matter when during the month depreciable real estate is purchased, it is considered to have been purchased at mid-month for MACRS depreciation purposes.

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