(TCO I) Under the cash method of tax accounting, tax deductions are generally taken when: (Points : 5) the liability arises. payment is made. the expense is actually incurred. None of the above Question 4. 4.
A tax advantage of business combination can occur when the existing owner of a company sells out and receives: a. cash to defer the taxable gain as a “tax-free reorganization” b. stock to defer the taxable gain as a “tax-free reorganization” c. cash to create a taxable gain d. stock to create a taxable gain 2. Publics Company acquired the net assets of Citizen Company during 20X9. The purchase price was $800,000. On the date of the transaction, Citizen had no long-term investments in marketable equity securities and $400,000 in liabilities. The fair value of Citizen assets on the acquisition date was as follows: |Current assets |$ 800,000 | |Noncurrent assets | 600,000 | | |$1,400,000 | How should Publics account for the $200,000 difference between the fair value of the net assets acquired, $1,000,000, and the cost, $800,000?
3. The Reform Act eliminates securities fraud as a reason for racketeering. This provides treble damages for the auditor. 4. The Reform Act limits third party rights to sue to only five times.
Can MegaCorp, Inc. deduct the loss as ordinary and necessary under IRC 162? Short Answer IRC 162 provides the general rule for determining deductibility of trade or business expenses as ordinary and necessary. This is the standard claim for support of deductibility, but there is no provision in this Code section for deducting items that are capital in nature, which is the IRS contention under IRC 263. The statute is silent as to litigation settlements paid as a result of corporate acquisitions. IRC 263 provides the general rule that no deduction shall be allowed for items that are capital in nature.
Which one of these is a non-cash item? • depreciation • interest expense • current taxes • dividends • selling expenses 6. Sankey, Inc., has current assets of $5,000, net fixed assets of $23,300, current liabilities of $4,450, and long-term debt of $11,000. (Do not round intermediate calculations.) What is the value of the shareholders' equity account for this firm?
a. cost of goods sold b. depreciation expense c. amortization expense d. None of these 5. Paid-in capital accounts are translated using the historical exchange rate under: a. the current rate method only. b. the temporal method only. c. both the current rate and temporal methods. d. neither the current rate nor temporal methods.
(0.5 points) Is the failure to make a payment, such as a scheduled mortgage payment or the finance charge on a credit card 4. What is the Better Business Bureau? (0.5 points) Is an organization that reports on the reliability and ethics of companies and other organizations 5. What is a debt settlement program? (0.5 points) Are programs that claim they can get you out of debt by negotiating your debt to a much lower amount and working out a payment plan with your creditors 6.
2. Which of the following statements regarding exclusions and/or deferrals is false? a. Exclusions are favorable because taxpayers never pay tax on income that is excluded. b. Interest income from municipal bonds is excluded from gross income.
A. Step 1 B. Step 2 C. Step 3 D. None of the Above 7) Which of the following is not one of the steps in the personal financial planning process? A. Identifying and evaluating alternative strategies for achieving goals B. Developing short-term and long-term financial goals C. Implementing a plan for achieving goals D. Determining appropriate risk level of participant 8) Preparing personal financial statements is part of which of the five steps of the financial planning process?
(0.5 points) Taxes on the companys income are paid on the personal tax forms of the companys owners. 2. What is an advantage of a sole proprietorship? (0.5 points) It’s the simplest and least expense type of business to set up or dissolve. 3.