Palmquist Corporation and Its 80%-Owned Subsidiary,Sadler Corporation,are Members of an Affiliated

question 6

Multiple Choice

Palmquist Corporation and its 80%-owned subsidiary,Sadler Corporation,are members of an affiliated group.They do not file consolidated tax returns.Sadler had $3,000,000 of income and paid $1,000,000 dividends in 2010.Palmquist and Sadler had 35% income tax rates.What amount of Sadler's dividends is taxable to Palmquist in 2010?

• A)$0
• B)$ 70,000
• C)$160,000
• D)$200,000

---

Definitions:

Operant Behavior

Behavior that is controlled by its consequences, including rewards and punishments, in the context of operant conditioning a type of learning process.

Associative Learning

The method through which a person grasps the association between two signals or between an action and its result.

Spontaneous Recovery

The reappearance of a learned response after its apparent extinction, often occurring in the absence of further conditioning.

Acquisition

The process of gaining a new skill, knowledge, behavior, or object through experience, practice, or the act of obtaining.