Identify Which of the Following Statements Is False

question 20

Multiple Choice

Identify which of the following statements is false.

• A)A Sec. 338 election usually triggers taxation to the target corporation.
• B)A Sec. 338 election must be made not later than the fifteenth day of the ninth month following the first stock acquisition in a series of acquisitions that leads to 80% or more stock ownership.
• C)When a Sec. 338 election is made, the target corporation is treated as having sold all of its assets at their FMV at the close of the acquisition date.
• D)In a Sec. 338 deemed sale election, the shareholders of the target corporation sell their stock to the acquiring corporation.

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Definitions:

Spoilage of Materials

Wastage or damage of raw materials during production that cannot be recovered or used.

Direct Labor Time Variance

The difference between the expected (or standard) time to produce goods and the actual time taken, often used in cost control.

Overhead

The ongoing administrative and general expenses of a business that are not directly attributable to specific products or services.

Standard Labor Hours

The estimated amount of time that should be required to produce a unit of product or to complete a process, task, or project.