83 2009 devrybecker educational development corp all

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Unformatted text preview: PassMaster Questions Lecture: Regulation 3 E. F. G. H. I. J. K. L. M. N. O. P. Q. R. $2,100 $2,700 $3,000 $5,000 $8,000 $21,570 $98,000 $200,000 $214,000 $300,000 $700,000 $1,000,000 $(13,430) $(14,550) CPA-04365 Explanation Choice "B" is correct. $1,000. Ral Corp. owned 5% of Sol Corp.'s stock. This ownership interest would normally entitle Ral to a 70% dividends received deduction (since it owned less than 20% of Sol's stock). However, in order to qualify for the dividends received deduction, the corporate shareholder, Ral, must have owned the investee corporation's stock, Sol Corp., for at least 45 days. In this case, Ral owned Sol's stock from 12/1/93 through 1/10/94 (less than 45 days). Consequently, Ral does not qualify for the dividends received deduction and the entire $1,000 dividend must be included in Ral's income. CPA-04373 Type1 M/C 145. CPA-04373 A-R Corr Ans: F PII May 92 #5 (Adapted) 10 PM#51 R 3-99 Page 3 Following is Ral Corp.'s condensed income statement, before federal income tax, for the year ended December 31, 1993: Sales Cost of sales Gross profit Operating expenses Operating income Other...
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This note was uploaded on 06/14/2013 for the course ACCOUNTING Regulation taught by Professor Becker during the Fall '10 term at Keller Graduate School of Management.

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