Acc 317 Wk 5 Midterm Exam - All Possible Questions

ACC 317 WK 5 Midterm Exam - All Possible Questions

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ACC 317 WK 5 Midterm Exam

1. Tomas owns a sole proprietorship, and Lucy is the sole shareholder of a C corporation. In the current year both businesses make a net profit of $60,000.  Neither business distributes any funds to the owners in the year. For the current year, Tomas must report $60,000 of income on his individual tax return, but Lucy is not required to report any income from the corporation on her individual tax return. 

True    False

2. Rose is a 50% partner in Wren Partnership. During the year, Wren earned net profit of $100,000 ($210,000 gross income – $110,000 operating expenses) and distributed $20,000 to each partner. Rose must report Wren Partnership profit of $20,000 on her Federal income tax return. 

True    False

3. Rajib is the sole shareholder of Robin Corporation, a calendar year S corporation. Robin earned net profit of $350,000 ($520,000 gross income – $170,000 operating expenses) and distributed $80,000 to Rajib. Rajib must report Robin Corporation profit of $350,000 on his Federal income tax return. 

True    False

4. Donald owns a 60% interest in a partnership that earned $230,000 in the current year.  He also owns 60% of the stock in a C corporation that earned $230,000 during the year.  Donald received $50,000 in distributions from each of the two entities during the year.  With respect to this information, Donald must report $188,000 of income on his individual income tax return for the year. 

True    False

5. Quail Corporation is a C corporation with net income of $125,000 during the current year. If Quail paid dividends of $25,000 to its shareholders, the corporation must pay tax on $100,000 of net income. Shareholders must report the $25,000 of dividends as income. 

True    False

6. Eagle Company, a partnership, had a short-term capital...