Mock Corporation Converts to S Corporation Status in 2014

question 96

Multiple Choice

Mock Corporation converts to S corporation status in 2014. Mock used the LIFO inventory method in 2013 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 Mock's 2013 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
• E) Some other amount

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Definitions:

Geographic Market

The physical region or area in which a company operates and competes for customers, defined by its geographical boundaries.

Tattoo Conventions

Events where tattoo artists, enthusiasts, and vendors gather to celebrate, display, and advance tattoo art.

Marketing Plan

A comprehensive document or blueprint that outlines a company's advertising and marketing efforts for the coming period, including strategies, target markets, and budget.

Multiplier Effect

The multiplier effect refers to the proportional amount of increase, or decrease, in final income that results from an injection, or withdrawal, of spending into the economy.