Acct 424 Quiz 1 and 2

Acct 424 Quiz 1 and 2 - Grade for Christine Martin Week 1...

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Grade for Christine Martin: Week 1 Quiz Numeric grade: 6/20 Letter grade: Comments: Chris, 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 3 JavaScript is required for your course. Please ensure JavaScript is enabled in your browser preferences. Grade Details 1. Question: (TCO 2) Penguin Corporation, a C corporation, has two equal shareholders, Bob and  Leo.  Penguin earned $100,000 net profit during its first year of operations and paid a  dividend of $50,000 to each shareholder.  Before considering the dividend, Bob is in  the 10% marginal tax bracket and Leo is in the 28% marginal tax bracket.  Which of  the following statements is incorrect? Date Taken: 3/9/2010 5:31:41 PM Time Spent: 0:30:50 (1:30 allowed) Points Received: 6 / 20 (30%)
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Your Answer: $100, 000 will be subje ct to doubl e taxati on. C ORR ECT Pengu in could have avoid ed payin g corpo rate tax if, instea d of payin g a divide nd, it had paid Bob and Leo a salary of $50,0 00 each (assu ming a $50,0 00 salary for each
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Instructor Explanation: To the extent Bob's dividend income would otherwise be taxed at 105 and 15%, the  preferential rate on his dividend is 0%.  thus, bob will not pay tax on some of his  dividend income and to that extent not all $100,000 is subject to double taxation. REF: p. 2-4 / p. 2-5 Points Received: 2 of 2 2. Question: (TCO 2) Sage, Inc., a closely held corporation (not a PSC), has a $140,000 passive  loss, $85,000 of active business income, and $35,000 of portfolio income.  How much  of the passive loss can Sage deduct?
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Your Answer: $0. $85,0 00. C ORR ECT $120, 000. $140, 000. None  of the  abov e.
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Instructor Explanation: As a closely held corporation, Sage may offset $85,000 of the $140,000 passive loss  against the $85,000 of active business income, but may not offset the remaining  $55,000 against portfolio income.  REF: Example 15 Points Received: 2 of 2 3. Question: (TCO 2) Grocer Services Corporation (a calendar year taxpayer), a wholesale  distributor of food, made the following donations to qualified charitable organizations  during the year:
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Adjusted Basis Fair Market Value Food (held as inventory) donated to the  OhioChildren’s Shelter  $7,500                 
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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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Acct 424 Quiz 1 and 2 - Grade for Christine Martin Week 1...

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