C12-Chp-02-5-CPA Exam-Sch-M-Adj-Etc-May-1995

C12-Chp-02-5-CPA Exam-Sch-M-Adj-Etc-May-1995 - Page 1 of 3...

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a4d4d5f12bf986e8a124dc6c4dd89a5226f7da22.doc. Page 1 of 3 Number 3 (Estimated time—25 to 40 minutes) May-1995 Question Number 3 consists of 28 items. Select the best answer for each item. Reliant Corp., an accrual basis calendar-year C corporation, filed its 2004 federal income tax return on March 15, 2005. (Dates increased by 10 years. Contains a few instructor notes regarding changes in tax law, etc.) Required: The following two responses are required for each of the Items 85 through 90. a. Determine the amount of Reliant's 2004 Schedule M-1 adjustment. b. Indicate if the adjustment : A increases, B decreases, or C has no effect, on Reliant's 2004 taxable income. 85 . Reliant's disbursements included reimbursed employees' expenses in 2004 for travel of $100,000, and business meals of $30,000. The reimbursed expenses met the conditions of deductibility and were properly substantiated under an accountable plan. The reimbursement was not treated as employee compensation. 86 . Reliant's books expensed $7,000 in 2004 for the term life insurance premiums on the corporate officers. Reliant was the policy owner and beneficiary. 87 . Reliant's books indicated an $18,000 state franchise tax expense for 2004. Estimated state tax payments for 2004 were $15,000. 88 . Book depreciation on computers for 2004 was $10,000. These computers, which cost $50,000, were placed in service on January 2, 2003. Tax depreciation used MACRS with the half-year convention. No election was made to expense part of the computer cost or to use a straight-line method or the alternative depreciation system. [Omit this question] 89 . For 2004, Reliant's books showed a $4,000 short-term capital gain distribution from a mutual
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This note was uploaded on 03/09/2012 for the course ACCT 6120 taught by Professor Godfrey,h during the Spring '08 term at UNC Charlotte.

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C12-Chp-02-5-CPA Exam-Sch-M-Adj-Etc-May-1995 - Page 1 of 3...

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