ACCT424 Lynn Corporation had $200,000 operating income and $75,000 operating expenses

Lynn Corporation had $200,000 operating income and $75,000 operating expenses during the year. In addition, Lynn had a $100,000 short-term capital gain and a $150,000 short-term capital loss. Compute Lynn’s taxable income for the year. (Points : 5)

$225,000

$125,000

$75,000

None of the above

2) Diamond Inc., has taxable income of $13 million this year. Which is the maximum DPAD tax savings for this C corporation? (Points : 5)
$132,600
$265,200
$273,000
$409,500
None of the above

3) As of January 1, Boulder Corporation has a deficit in accumulated E & P of $37,500. For the tax year, current E & P (all of which accrued ratably) is $20,000 (prior to any distribution). On July 1, Boulder Corporation distributes $25,000 to its sole, noncorporate shareholder. The amount of the distribution that is a dividend is _____. (Points : 5)
$0
$20,000
$25,000
$37,500
None of the above

4)Jeffrey Corporation has accumulated E & P of $30,000 on January 1. During the year, the corporation distributes $120,000 to its sole shareholder, Abe (an individual). Jeffrey Corporation's E & P as of January 1 of the following year is _____. (Points : 5)

$0
($35,000)
$40,000
$85,000
None of the above

5) Pursuant to a plan of corporate reorganization adopted in the current year, Thomas exchanged 1,000 shares of Cyndy Corporation common stock which he had purchased for $325,000 for 1,200 shares of Play Corporation common stock that have a fair market value of $663,000. As a result of the exchange, Thomas’ recognized gain and his basis in the Play stock are (Points : 5)
no recognized gain and basis of $325,000.
no recognized gain and basis of $663,000.
recognized gain of $338,000 and basis of $663,000.
None of the above

6) ZV Corporation was acquired last year by GJ Corporation in a transaction causing an ownership change. At the time of the acquisition, the fair market value of ZV was $1.5 million, and the federal long-term tax-exempt rate was 5%. In the current year, GJ has $600,000 of taxable income and excess credits carryovers from ZV amounting to $40,000. Which is GJ's federal income tax for the year if GJ is in the 34% tax bracket? (Points : 5)
$178,500
$96,000
$55,000
$27,540
None of the above