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Unformatted text preview: $(14,550) CPA-04351 Explanation Choice "C" is correct. $1,400. Ral Corp. owns 30% of Clove Corp.'s stock. A corporate shareholder who owns between 20% and less than 80% of a corporation's stock is entitled to an 80% dividends received deduction. Clove paid $7,000 in dividends to Ral. Ral may take a $5,600 dividends received deduction. Therefore, the amount that will be included in Ral's income is $1,400. CPA-04356 Type1 M/C 143. CPA-04356 A-R Corr Ans: D PII May 92 #5 (Adapted) 8 PM#49 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 income (loss): Interest Dividends Net long-term capital loss Income before federal income tax $1,000,000 (700,000) 300,000 (220,000) 80,000 $5,200 19,200 (6,400) Additional information: Interest arose from the following sources: U.S. Treasury notes Municipal bonds Total interest 18,000 98,000 $ 3,000 2,200 5,200 Dividends aros...
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