C10-Chp-00-Tst-2-Exm-2010-Nite -...

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3ba03e6abfa427f674a562114c18a04228934ce1.doc. Page 1 of 6 Accounting 6120. Corporate Taxation – Examination no. 2-Night Class Spring, 2010. The University of North Carolina at Charlotte Name________________________________________________ Row In Class__________ Instructions : You may use your code and regs book during the test. You may also use up to 6 pages of notes- front and back, as well as any outlines of code provided by the instructor in class or on the web page. You may not use your regular tax textbook when answering questions on this test. Avoid all appearances of impropriety. If you see any sign of impropriety, please prepare an anonymous note and slide it under the instructor's office door. Please turn in both the test and the computer answer sheet. Be sure to complete the name and row lines above. On your Opscan Sheet , your Student ID Number is entered as your "Identification Number." Your test number is entered in the "special codes" area, right justified. Your test number is written in red at the top of this test. The grade will be determined as follows: 100 points, less 4 points per incorrect answer. Distributions 1 Mrs. Yee purchased stock in Jones Corporation in 2007 for $2,000. In 2009 , she received a distribution of $800, when Jones had no current or accumulated earnings and profits. In 2010 , Mrs. Yee received a $200 dividend, when Jones had current earnings and profits in excess of its dividend distribution. There has been no other activity related to this stock. What is Mrs. Yee's taxable dividend income for 2009 and 2010, and what is her basis in the Jones Corporation stock as of December 31, 2010? (Sec. 301, 316, 317) 2009 Div. Income 2010 Div. Income Stock Basis 12-31-2010 a. $ 0 $200 $2,000 b. $ 0 $200 $1,200 c. $800 $200 $1,200 d. $800 $ 0 $2,000 2 Davis Corporation, an accrual method taxpayer, had accumulated earnings and profits of $100,000 as of December 31, 2008. For the 2009 tax year, Davis' books and records reflect the following: Sales $ 700,000 Cost of sales $ 400,000 Municipal bond interest 12,000 Compensation 100,000 Meals and entertainment (Gross) 20,000 Payroll taxes, and Miscellaneous Expense 150,000 Subtotal 670,000 712,000 Net Income before taxes 42,000 Total $ 712,000 $ 712,000 Davis does not have any carryover of losses, deductions or credits to the current year. The company does not qualify for any credits in the current year. You may ignore the impact of state income taxes. What is the amount of Davis Corporation's accumulated earnings and profits as of January 1, 2010? a. $134,500 b . $136,000 c. $140,000 d . $313,000 e. Other 3 Charlotte Corp, a calendar year taxpayer, reported in 2010: Accumulated earnings and profits balance at 1-1-2010 $20,000 Cash distribution to sole individual shareholder in 2010 $30,000 Taxable income for 2010 $60,000 Federal income taxes for 2010 ? Municipal bond interest earned in 2010
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This note was uploaded on 11/28/2011 for the course ACCT 5110 taught by Professor Jkn during the Spring '11 term at Punjab Engineering College.

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C10-Chp-00-Tst-2-Exm-2010-Nite -...

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