A Corporation Has the Following Capital Gains and Losses During

question 72

Multiple Choice

A corporation has the following capital gains and losses during the current year: The tax result to the corporation is

• A)$10,000 NLTCG included in gross income and taxed at ordinary rates; $4,000 NSTCG included in gross income and taxed at reduced rates.
• B)$14,000 included in gross income and taxed at reduced rates.
• C)$14,000 included in gross income and taxed at ordinary rates.
• D)$10,000 NLTCG is included in gross income and taxed at reduced rates; and $4,000 NSTCG included in gross income and taxed at ordinary rates.

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Definitions:

Credit Memo

A document issued by a seller to a buyer, reducing the amount owed by the buyer under specified circumstances, like returns or discounts.

Closing Entries

Journal entries made at the end of an accounting period to transfer the balances of temporary accounts to permanent accounts, thereby preparing the books for the next period.

Owner's Drawings

The amount of money taken from the business by the owner for personal use, not considered a business expense.

Sales Revenue

A company's total income from product sales or service charges prior to the deduction of any operational expenses.