Mock Corporation Converts to S Corporation Status in 2012

question 31

Multiple Choice

Mock Corporation converts to S corporation status in 2012.Mock used the LIFO inventory method in 2011 and had a LIFO inventory of $435,000 (FIFO value of $550,000) on the date of the S election.How much tax must be added to the 2011 corporate tax liability, assuming that Mock is subject to a 35% tax rate.

• A)$0.
• B)$10,062.50.
• C)$40,250.
• D)$115,000.

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Definitions:

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The school of jurisprudence which dictates that context must be considered as well as law. Context includes factors such as economic conditions and social conditions.

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Laws that concern relationships between individuals and the government, including constitutional, administrative, and criminal laws.

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Civil law is a legal system originating in Europe, intellectualized within the framework of Roman law, and comprising a comprehensive set of legal codes that govern private law matters.

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A body of law pertaining to crimes and punishment, focusing on behaviors that are sanctioned under criminal statutes.