Barry Owns All of the Stock of Jerrico Corporation; an Internet

question 23

Multiple Choice

Barry owns all of the stock of Jerrico Corporation; an internet based gaming firm. Barry is also the President of and works full-time for Jerrico. During the current year, Jerrico has a loss of $125,000 from its operations.
i.If Jerrico is an S Corporation, Barry may deduct the loss on his personal tax return as a deduction for AGI.II.If Jerrico is a regular corporation, the corporation can carry the loss forward indefinitely to reduce taxable income in future years.
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• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

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Definitions:

Outstanding Check

A check that has been written and issued but not yet cashed or cleared by the bank.

Service Charge

A charge imposed to cover expenses associated with the main product or service being acquired.

Adjusted Cash Balance

The cash amount shown on a company's books after adjustments have been made for checks written or deposits in transit.

Check Register

A record kept by an account holder of checks written and deposits made into their checking account.