Mock Corporation Converts to S Corporation Status in 2016

question 34

Multiple Choice

Mock Corporation converts to S corporation status in 2016. Mock used the LIFO inventory method in 2015 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 2015 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:

Radioactive Glucose

Radioactive glucose is often used in medical imaging, particularly in positron emission tomography (PET) scans, to track metabolic processes and blood flow in the body.

PET

Positron Emission Tomography, a nuclear medicine functional imaging technique used to observe metabolic processes in the body as an aid to the diagnosis of diseases.

Motor Functions

The physiological capacities and activities related to the movement of body parts controlled by the nervous system.

Recognition

The cognitive process of identifying and acknowledging the presence of something previously seen, heard, or experienced.