Mock Corporation Converts to S Corporation Status in 2013

question 105

Multiple Choice

Mock Corporation converts to S corporation status in 2013.Mock used the LIFO inventory method in 2012 and had a LIFO inventory of $435,000 (FIFO value of $550,000) on the date of the S election.How much tax must be added to Mock's 2012 corporate tax liability,assuming that Mock is subject to a 35% tax rate.

• A)$0.
• B)$10,062.50.
• C)$40,250.
• D)$115,000.
• E)Some other amount.

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Definitions:

Central Canal

A fluid-filled channel in the center of the spinal cord.

Lamella

Thin layers or plates, such as those found in bone, making up the concentric rings in the structure of compact bone.

Canaliculus

Small, channel-like structures in bone and dental tissue, facilitating nutrients and waste exchange between blood vessels and osteocytes.

Lacuna

A small cavity or space within tissue, especially in bone or cartilage, where cells reside.