Sunset Corporation (A C Corporation) Had Operating Income of $200,000

question 22

Multiple Choice

Sunset Corporation (a C corporation) had operating income of $200,000 and operating expenses of $175,000. In addition, Sunset had a $30,000 long-term capital gain, a $52,000 short-term capital loss, and $5,000 tax-exempt interest income. What is Sunset Corporation's taxable income for the year?

• A) $0
• B) $3,000
• C) $22,000
• D) $30,000
• E) None of these.

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Definitions:

Work-in-Process Inventory

Goods partially worked on but not yet completed; an inventory account that tracks the value of materials and labor input into products that are in the production process.

Direct Labor Dollars

The total amount of money paid to workers who are directly involved in manufacturing a product or delivering a service.

Manufacturing Overhead-Applied

The portion of manufacturing costs not directly associated with the production of goods that are assigned to units produced.

Overhead-Applied Account

Refers to an account where the applied (estimated) manufacturing overhead costs are accumulated.