Ralph Is Single and Reports the Following Items for 2019

question 68

Multiple Choice

Ralph is single and reports the following items for 2019: $\begin{array}{lc}\text { Nonbusiness capital gains } & 9,000 \\\text { Nonbusiness capital losses } & (3,000) \text { Interest } \\\text { income } & 6,000 \\\text { Itemized deductions (none of the amount resulted from a casualty loss) } & (10,000) \end{array}$ In calculating Ralph's net operating loss and with respect to these amounts only, what amount must be added back to taxable income (loss) ?

• A) $0
• B) $200
• C) $2,000
• D) $3,000
• E) None of these.

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Definitions:

Direct Method

A way of preparing the cash flow statement where actual cash flows from operating activities are listed directly.

FASB's Agenda

The Financial Accounting Standards Board's schedule of planned topics to discuss, with the aim of setting and improving accounting standards in the United States.

Dividends Paid

The portion of a company's earnings distributed to shareholders as a payment, typically in cash or additional shares.

Indirect Method

A way of presenting a cash flow statement where net income is adjusted for changes in balance sheet accounts to calculate cash flow from operating activities.