chapter 12 practice test

chapter 12 practice test - chapter 12 practice test...

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chapter 12 practice test Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. Which of the following best describes the treatment applicable to unused business credits? a. Unused amounts are carried forward indefinitely. b. Unused amounts are first carried back one year and then forward for 20 years. c. Unused amounts are first carried back one year and then forward for 10 years. d. Unused amounts are first carried back three years and then carried forward for 15 years. e. None of the above. ____ 2. Molly has generated general business credits over the years that have not been utilized. The amounts generated and not utilized follow: 2006 $ 5,000 2007 15,000 2008 10,000 2009 8,000 In the current year, 2010, her business generates an additional $30,000 general business credit. In 2010, based on her tax liability before credits, she can utilize a general business credit of up to $40,000. After utilizing the carryforwards and the current year credits, how much of the general business credit generated in 2010 is available for future years? a. $0. b. $2,000. c. $23,000. d. $28,000. e. None of the above. ____ 3. Several years ago, Tom purchased a structure for $150,000 that was originally placed in service in 1929. Three and one-half years ago he incurred qualifying rehabilitation expenditures of $300,000. In the current year, Tom sold the property in a taxable transaction. Calculate the amount of the recapture of the tax credit for rehabilitation expenditures. a. $0. b. $12,000. c. $18,000. d. $24,000. e. None of the above. ____ 4. In March 2010, Gray Corporation hired two individuals, both of whom were certified as long-term recipients of family assistance benefits. Each employee was paid $11,000 during 2010. Only one of the individuals continued to work for Gray Corporation in 2011, earning $9,000 during the year. No additional workers were hired in 2011. Gray Corporation’s work opportunity tax credit amounts for 2010 and 2011 are: a. $4,000 in 2010, $4,000 in 2011. b. $8,000 in 2010, $4,500 in 2011. c. $8,000 in 2010, $5,000 in 2011. d. $8,000 in 2010, $9,000 in 2011. e. None of the above. ____ 5. Which, if any, of the following correctly describes the research activities credit?
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a. The research activities credit is the greater of the incremental research credit, the basic research credit, or the energy research credit. b. If the research activities credit is claimed, no deduction is allowed for research and experimentation expenditures. c. The credit is not available for research conducted outside the United States. d. All corporations qualify for the basic research credit. e. None of the above. ____ 6. During the year, Green Corporation (a U.S. corporation) has U.S.-source income of $1,500,000 and foreign income of $1,000,000. The foreign-source income generates foreign income taxes of $480,000. The U.S. income tax before the foreign tax credit is $850,000. Green Corporation’s foreign tax credit is:
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This note was uploaded on 02/01/2011 for the course ACCT 401 taught by Professor Savage,g during the Fall '08 term at Winthrop.

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chapter 12 practice test - chapter 12 practice test...

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