King Corporation, a Cash Method Taxpayer That Uses the Calendar

question 37

Multiple Choice

King Corporation, a cash method taxpayer that uses the calendar year as its tax year, was incorporated on June 1, 1984. The corporation made its initial S election on December 1 of last year, effective for the current tax year. Earnings and profits of $60,000 have been retained from C corporation tax years. Which one of the following events results in the recognition of a built-in gain?

• A)collection of accounts receivable in the current year that resulted from services performed last year
• B)collection of interest income earned in the current year on bonds purchased on January 1 of last year
• C)collection of dividends declared on April 5 of the current year on stock purchased on February 14 of the current year
• D)None of the above are built-in gains.

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Chi-square Statistic

A statistical measure used to assess the differences between categorical variables from a sample.

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The process by which eligible citizens register or enroll to vote in elections.

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The political party with which an individual identifies or supports.

Null Hypothesis

A hypothesis that there is no significant difference or effect, often set as a default stance to be tested against an alternative hypothesis.