In the Current Year, Norris, an Individual, Has $50,000 of Ordinary

question 28

Multiple Choice

In the current year, Norris, an individual, has $50,000 of ordinary income, a Net Short Term Capital Loss (NSTCL) of $10,000 and a Net Long Term Capital Gain (NLTCG) of $2,800. From his capital gains and losses, Norris reports:

• A) an offset against ordinary income of $10,000.
• B) an offset against ordinary income of $3,000 and a NSTCL carryforward of $7,000.
• C) an offset against ordinary income of $2,800 and a NSTCL carryforward of $7,200.
• D) an offset against ordinary income of $3,000 and a NSTCL carryforward of $7,200.
• E) an offset against ordinary income of $3,000 and a NSTCL carryforward of $4,200.

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Definitions:

Activity Cost Pool

Refers to a grouping of all costs related to a specific activity used in activity-based costing to allocate overhead costs more accurately to products or services.

Activity-Based Costing

A method of costing that assigns costs to products or services based on the activities they require.

Activity Rate

The measure used to allocate costs to activities based on their use of resources.

Activity Cost Pool

A grouping of all the costs related to a particular activity, used in activity-based costing to more accurately allocate costs to products or services.