Joy Reports the Following Income and Loss Activities A, B, and C Are All Passive Activities

question 84

Multiple Choice

Joy reports the following income and loss: $$\begin{array} { | l | r | } \hline \text { Salary } & \$ 120,000 \\\hline \text { Income from activity A } & 60,000 \\\hline \text { Loss from activity B } & ( 35,000 ) \\\hline \text { Loss from activity C } & ( 55,000 ) \\\hline\end{array}$$ Activities A, B, and C are all passive activities.
Based on this information, Joy has the following suspended losses:

• A) \[\begin{array} { | l | l | }
• \hline \text { Activity B } & \text { Activity C } \\
• \hline \$ 11,667 & \$ 18,333 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | l | l | }
• \hline \text { Activity B } & \text { Activity C } \\
• \hline \$ 35,000 & \$ 55,000 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | l | l | }
• \hline \text { Activity B } & \text { Activity C } \\
• \hline \$ 10,000 & \$ 20,000 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | l | l | }
• \hline \text { Activity B } & \text { Activity C } \\
• \hline \$ 0 & \$ 0 \\
• \hline
• \end{array}\]

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Definitions:

Premium

The amount paid for an insurance policy, or the difference between the higher price paid for a bond above its face value.

Discount

A reduction applied to the regular price of goods or services, often to encourage sales.

Par Value

A nominal value or face value assigned to a share of stock by the corporation at the time of issue.

Articles Of Incorporation

These are legal documents filed with a governmental body to legally document the creation of a corporation.