During 2012, Sparrow Corporation, a Calendar Year C Corporation, Had

question 8

Multiple Choice

During 2012, Sparrow Corporation, a calendar year C corporation, had operating income of $425,000, operating expenses of $280,000, a short-term capital loss of $10,000, and a long-term capital gain of $25,000.How much is Sparrow's tax liability for 2012?

• A)$42,650.
• B)$42,800.
• C)$45,650.
• D)$62,400.
• E)None of the above.

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Definitions:

Public Good

A good that is non-excludable and non-rivalrous, meaning it can be used by everyone and one person's use does not reduce availability to others.

Nongovernmental Organization

A nonprofit, voluntary citizens' group which is organized on a local, national or international level to perform a variety of service and humanitarian functions.

Governments

Institutions responsible for governing a community, state, or nation, making and enforcing laws, and managing public resources and services.

Market Failure

A situation where the allocation of goods and services by a free market is not efficient, often leading to negative externalities, underproduction, or overproduction.