Ron and Tom Are Equal Owners in Robin Corporation

question 36

Multiple Choice

Ron and Tom are equal owners in Robin Corporation.On July 1,2010,each loans the corporation $20,000 at annual interest of 10%.Ron and Tom are brothers.Both shareholders are on the cash method of accounting,while Robin Corporation is on the accrual method.All parties use the calendar year for tax purposes.On June 30,2011,Robin repays the loans of $40,000 together with the specified interest of $4,000.How much of the interest can Robin Corporation deduct in 2010?

• A)$0.
• B)$1,000.
• C)$2,000.
• D)$4,000.
• E)None of the above.

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Definitions:

Postconventional Reasoning

A stage of moral development in which the individual's moral reasoning is based on personal principles and values rather than conventional rules.

Preconventional Reasoning

A stage in moral development where individuals make judgments based on external consequences rather than internal ethics or societal rules.

Maintain Identity

The process of preserving a sense of self or individuality, often in the face of change or within group dynamics.

Priority

The importance given to a task or patient care need over others based on urgency or criticality.