Mock Corporation Converts to S Corporation Status in 2020

question 9

Multiple Choice

Mock Corporation converts to S corporation status in 2020. Mock used the LIFO inventory method in 2019 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 2019 corporate tax liability, assuming that Mock is subject to a 21% tax rate.

• A) $-0-
• B) $6,038
• C) $24,150
• D) $115,000

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Definitions:

Victory Gardens

Homegrown gardens that were promoted during World Wars I and II in the United States to support the war effort by increasing food production.

War Effort

The collective endeavors of a nation or group to mobilize and dedicate resources towards the successful conduct of a war.

War Bonds

Government-issued bonds sold during times of war to raise money for military operations and support the national economy.

Eleanor Lambert

A prominent figure in the American fashion industry, credited with founding New York Fashion Week and promoting American designers internationally.