Acct424quiz - Grade for Jennifer Lewis: Week 1 Quiz Numeric...

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Grade for Jennifer Lewis: Week 1 Quiz Numeric grade: 8/20 Letter grade: Comments: Jennifer, Thank you for a wonderful attempt on your first quiz of the semester. I would like you to review the quiz for reference on the mid-term exam. For next week’s quiz, you will receive a review on Tuesday evening and problems will be worked in the discussion. Also, you can ask any questions on the homework in the Discussion Forum. If you have any questions, please feel free to e-mail me. < Close Window Autograde Summary These are the automatically computed results of your exam. Grades for essay questions, and comments from your instructor, are in the "Details" section below. Question Type: # Questions: # Correct: Multiple choice 10 4 Grade Details 1. Question: (TCO 2) Mac is the owner of Maid in Arizona Cleaning Service (MACS).  This  year, the company had gross income of $300,000 and operating expenses of  $195,000.  In July, MACS sold a capital asset that had been held by the  business for two years for a $15,000 loss.  During the year, Mac withdrew  $93,000 from the business for his personal living expenses.  Assuming MACS  is a sole proprietorship, how do these transactions affect Mac’s taxable  income for the year? Your Answer: Increase taxable income by $105,000. Increase taxable income by $102,000. CORRECT ANSWER Increase taxable income by $93,000. INCORRECT Increase taxable income by $90,000. None of the above Instructor Explanation: Mac reports the income and expenses of the business on Schedule C,  resulting in net profit (ordinary income) of $105,000 ($300,000 – $195,000).   He reports all of the $105,000 net profit from the business on Form 1040,  where he computes taxable income for the year.  The $93,000 that Mac  withdrew from the business has no impact on his taxable income.  He also  reports a $15,000 LTCL on Schedule D of his Form 1040, but his deduction is  limited to $3,000.  The remaining LTCL of $12,000 ($15,000 – $3,000) may be  Date Taken: 3/7/2010 6:44:05 PM Time Spent: 1:09:29 (1:30 allowed) Points Received: 8 / 20 (40%)
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carried forward.  The net effect is to increase his taxable income by $102,000  ($105,000 net profit – $3,000 LTCL).   Points Received: 0 of 2 2. Question: (TCO 2) Barry owns a 30% interest in a partnership that earned $300,000 this  year.  He also owns 30% of the stock in a C corporation that earned $300,000  during the year.  The partnership did not make any distributions and the  corporation did not pay any dividends.  How much income must Barry report  from these businesses? Your
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This note was uploaded on 04/22/2010 for the course ACCT ACCT424 taught by Professor Tracie during the Spring '10 term at DeVry Chicago O'Hare.

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Acct424quiz - Grade for Jennifer Lewis: Week 1 Quiz Numeric...

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