Mullins Corporation Is Classified as a PHC for the Current

question 95

Essay

Mullins Corporation is classified as a PHC for the current year,reporting $263,000 of taxable income on its federal income tax return:
$\begin{array}{ll}\text { Operating profit } & \$ 150,000 \\\text { Long-term capital gain } & 20,000 \\\text { Short-term capital gain } & 20,000 \\\text { Dividends (from 25\%-owned domestic corporation) } & 200,000 \\\text { Interest } & 150,000\\\text { Gross income } & \$ 540,000 \\\text { Minus: general and administrative expenses } & (40,000) \\\text { Minus: salaries } & (30,000)\\\text { "Adjusted" taxable income } & \$ 470,000 \\\text { Minus: charitable contributions } & (47,000) \\\text { Taxable income before special deductions } & \$ 423,000 \\\text { Minus: dividends-received deduction } & (160,000 \\\text { Taxable income } & \$ 263,000\end{array}$ Actual charitable contributions made by Mullins Corporation were $75,000.What are the federal income tax due and the personal holding company (PHC)tax liability? Discuss the methods (if any)by which payment of the PHC tax can be avoided.

Identify factors contributing to taste aversions and the evolutionary perspective of learning.

Understand observational learning and its implications on behavior.

Acknowledge the role and effect of media and video games on behavior and learning.

Distinguish between primary and secondary reinforcers.

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Definitions:

Onerous Contracts

Contracts in which the unavoidable costs of meeting the obligations exceed the economic benefits expected to be received under it.

Accruals

Accounting method that records revenues and expenses when they are earned or incurred, regardless of when cash transactions occur, reflecting the economic activity more accurately.

Employee Benefits

All forms of consideration given by an entity in exchange for service rendered by employees or for the termination of employment.

Insurance Contracts

Contracts under which one party (the insurer) accepts significant insurance risk from another party (the policyholder) by agreeing to compensate the policyholder if a specific uncertain future event adversely affects the policyholder.