Unformatted text preview: ring the year or by the 15th day of the third
month after the taxpayer year ends.
Choices "b", "c", and "d" are incorrect, per the above rule. CPA-02223 Type1 M/C 109. CPA-02223 A-D May 90 II #35 Corr Ans: C PM#15 R 3-99 Page 25 For the year ended December 31, 1989, Maple Corp.'s book income, before federal income tax, was
$100,000. Included in this $100,000 were the following:
Provision for state income tax
Interest earned on U.S. Treasury Bonds
Interest expense on bank loan to purchase U.S. Treasury Bonds $1,000
2,000 Maple's taxable income for 1989 was:
Choice "c" is correct. Maple's taxable income for 1989 was $100,000.
No adjustments from book income are required:
1. State income taxes are a deductible corporate expense.
2. Interest earned on U.S. treasury bonds are taxable.
3. Interest expense on bank loans to purchase U.S. treasury bonds are deductible since the interest
income earned on U.S. treasury bonds is taxable.
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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.
- Fall '10
- The Land