ACCT424 Lynn Corporation had $200,000 operating income and $75,000 operating expenses

| April 14, 2018

Lynn Corporation had $200,000 operating income and $75,000 operating expenses during the year. In addition, Lynn had a $100,000 short-term capital gain and a $150,000 short-term capital loss. Compute Lynn’s taxable income for the year. (Points : 5)$225,000$125,000$75,000None of the above2) Diamond Inc., has taxable income of $13 million this year. Which is the maximum DPAD tax savings for this C corporation? (Points : 5)$132,600$265,200$273,000$409,500None of the above3) As of January 1, Boulder Corporation has a deficit in accumulated E & P of $37,500. For the tax year, current E & P (all of which accrued ratably) is $20,000 (prior to any distribution). On July 1, Boulder Corporation distributes $25,000 to its sole, noncorporate shareholder. The amount of the distribution that is a dividend is _____. (Points : 5)$0$20,000$25,000$37,500None of the above4)Jeffrey Corporation has accumulated E & P of $30,000 on January 1. During the year, the corporation distributes $120,000 to its sole shareholder, Abe (an individual). Jeffrey Corporation’s E & P as of January 1 of the following year is _____. (Points : 5)$0($35,000)$40,000$85,000None of the above5) Pursuant to a plan of corporate reorganization adopted in the current year, Thomas exchanged 1,000 shares of Cyndy Corporation common stock which he had purchased for $325,000 for 1,200 shares of Play Corporation common stock that have a fair market value of $663,000. As a result of the exchange, Thomas’ recognized gain and his basis in the Play stock are (Points : 5)no recognized gain and basis of $325,000.no recognized gain and basis of $663,000.recognized gain of $338,000 and basis of $663,000.None of the above6) ZV Corporation was acquired last year by GJ Corporation in a transaction causing an ownership change. At the time of the acquisition, the fair market value of ZV was $1.5 million, and the federal long-term tax-exempt rate was 5%. In the current year, GJ has $600,000 of taxable income and excess credits carryovers from ZV amounting to $40,000. Which is GJ’s federal income tax for the year if GJ is in the 34% tax bracket? (Points : 5)$178,500$96,000$55,000$27,540None of the above

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