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Neither I nor II. CPA-02119
Choice "c" is correct. Blink cannot use the 100% of preceding tax year method in 1994 because it did not
pay income tax in 1993. Blink can use the annualized income method.
Choices "a", "b", and "d" are incorrect. Each of these answers treats I and/or II incorrectly. CPA-02122 Type1 M/C A-D 42. CPA-02122 ARE Nov 94 #53 Corr Ans: C PM#58 R 3-01 Page 43 In a Type B reorganization, as defined by the Internal Revenue Code, the:
I. Stock of the target corporation is acquired solely for the voting stock of either the acquiring
corporation or its parent.
II. Acquiring corporation must have control of the target corporation immediately after the acquisition. a.
d. I only.
Both I and II.
Neither I nor II. CPA-02122
Choice "c" is correct. Both requirements listed are necessary in a Type B reorganization. In a Type B
reorganization, the target is acquired using the stock of the acquiring corporation or the acquiring
corporation's parent (triangular acquisition). In a Type B reorganization, the acquiring corporation must
be in control of the target immediately after the acquisition.
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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