Questions from General Taxation

Q: Arnold Corporation (a calendar-year, accrual-basis taxpayer

Arnold Corporation (a calendar-year, accrual-basis taxpayer) reported $500,000 pre-tax income on its financial statements for the year. In examining its records, you find the following: • $3,000 of i...

Q: Refer to the information in problem 42 for Arnold Corporation.

Refer to the information in problem 42 for Arnold Corporation. a. Identify which of Arnold Corporation’s book/tax differences result in a deferred tax asset or a deferred tax liability. b. Prepare t...

Q: Barley Corporation used the FIFO method for inventory valuation when it began

Barley Corporation used the FIFO method for inventory valuation when it began operations because this reflected the true physical flow of inventory. Its inventory under FIFO is valued at $375,000 at t...

Q: Martin Galloway, the sole proprietor of a consulting business, has

Martin Galloway, the sole proprietor of a consulting business, has gross receipts of $45,000 in 2017. His address is: 1223 Fairfield Street, Westfield, New Jersey and his SSN is 158-68-7799. Expenses...

Q: Melinda has been offered two competing employment contracts for the next two

Melinda has been offered two competing employment contracts for the next two years. Argus Corporation will pay her a $75,000 salary in both years 1 and 2. Dynamic Corporation will pay Melinda a $100,0...

Q: Global Corporation is looking for a new CEO. The board of

Global Corporation is looking for a new CEO. The board of directors selected Miguel as the top candidate. During negotiations, Miguel indicated he wanted a $2 million salary in addition to the stock-b...

Q: Maria, age 42, just resigned from Bygone Corporation to accept

Maria, age 42, just resigned from Bygone Corporation to accept a new job with Future, Inc. Bygone informed Maria that she has a $38,000 balance in its qualified retirement plan and wants to know if sh...

Q: William, an employee for Williamson Corporation, receives an annual salary

William, an employee for Williamson Corporation, receives an annual salary of $120,000 and is in the 28 percent marginal tax bracket. He is eligible to contribute to Williamson’s 401(k) plan and could...

Q: Jessica plans to invest $150,000 in a second business

Jessica plans to invest $150,000 in a second business. She expects to generate a 12 percent before-tax return on her investment the first year. Her marginal tax rate is 25 percent due to the income fr...

Q: Differentiate a progressive tax system from a proportional and a regressive system

Differentiate a progressive tax system from a proportional and a regressive system and give examples of each.