Gleim Questions

26398 Words Dec 15th, 2013 106 Pages
In Year 1, Brun Corp. properly accrued $10,000 for an income item on the basis of a reasonable estimate. In Year 2, Brun determined that the exact amount was $12,000. Which of the following statements is true? | | A. | Brun is required to file an amended return to report the additional $2,000 of income. | B. | Brun is required to notify the IRS within 30 days of the determination of the exact amount of the item. | C. | The $2,000 difference is includible in Brun’s Year 2 income tax return. | | ABC Corporation ends its tax year on October 30. When must ABC’s income tax return be filed for the year ending October 30, Year 1? | | A. | January 15, Year 2. | | An S corporation engaged in manufacturing has a year end of June …show more content…
| | A. | Any new domestic eligible entity having at least two or more members is classified as a partnership. | B. | Any new domestic eligible entity with a single member is disregarded as an entity separate from its owner. | C. | If all members of a new foreign entity have limited liability, the entity is classified as an association taxed as a corporation. | D. | All of the answers are correct. | | All of the following businesses, formed after 1996, are automatically classified as corporations except | | A. | An insurance company. | B. | A partnership that possesses at least three of the following characteristics: limited liability, centralized management, free transferability of interest, and continuity of life. | | In 2012, CPAs, Inc., a corporation owned entirely by its employees, all of whom are certified public accountants performing only services in the accounting profession, had taxable income of $110,000. The corporation has never exceeded $5 million in gross receipts. The following is an excerpt from the 2012 corporation income tax rates schedule: Income | But Not | | % on | Of Amount | at Least | over | Pay + | Excess | over | | | | | | | | | | | 0 | 50,000 | 0 | 15% | 0 | 50,000 | 75,000 | 7,500 | 25% | 50,000 | 75,000 | 100,000 | 13,750 | 34% | 75,000 | 100,000 | 335,000 | 22,250 | 39% | 100,000 |
What is the tax liability of CPAs, Inc., for 2013? |

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