Prior to 2018, Domestic Corporation X Owns All the Stock

question 32

Multiple Choice

Prior to 2018, domestic corporation X owns all the stock of controlled foreign corporation (CFC) T. X's acquisition cost for the CFC investment is $150,000. The CFC reports E&P of $200,000 since the domestic corporation acquired its interest, of which $120,000 was Subpart F income. The CFC makes a cash distribution of $90,000 to the domestic corporation. What is the domestic corporation's basis for its investment in T immediately after the cash distribution?

• A)$150,000
• B)$180,000
• C)$230,000
• D)none of the above

Interpret R-squared in the context of cost variation and its explanatory power regarding the independent variable.

Apply the high-low method to estimate variable and fixed components of costs from given data.

Analyze mixed costs using different approaches including the high-low method, least-squares regression, and account analysis.

Estimate the total cost, variable cost per unit, fixed costs, and contribution margin using cost-volume-profit (CVP) analysis.

---

Definitions:

Turbulence

A state of fluid flow characterized by chaotic, irregular motion, often encountered in the atmosphere or in flowing water.

Discharge Pattern

The variation in the volume of water that flows in a stream or river over time.

Hydrograph

A chart that illustrates the change in discharge rate over time at a particular location in a river, or any other flow-carrying channel or conduit.

Increases

The act or process of becoming larger or greater in size, amount, number, or degree.