ACC 547 MASTER Learn by Doing/acc547master.com ACC 547 MASTER Learn by Doing/acc547master.com | 页面 6

NOL or capital loss carryback, dividends-received deduction, or U.S.
production
activities deduction.
a. How much is Zeta’s charitable contributions deduction in 2006? In
2007?
b. What is Zeta’s contribution carryover to 2008, if any?
Problem C3-58
Converting Book Income to Taxable Income. The following income
and expense
accounts appeared in the accounting records of Rocket Corporation,
an accrual basis taxpayer,
for the current calendar year.
... .... .... ... (details in the pdf file)
The following additional information applies.
1. Dividends were from Star Corporation, a 30%-owned domestic
corporation.
2. Interest revenue consists of interest on corporate bonds, $15,000;
and municipal
bonds, $3,000.
3. The stock is a capital asset held for three years prior to sale.
4. Rocket uses the specific writeoff method of accounting for bad
debts.
5. Interest expense consists of $11,000 interest incurred on funds
borrowed for working
capital and $1,000 interest on funds borrowed to purchase municipal
bonds.
6. Rocket paid all contributions in cash during the current year to
State University.
7. Rocket calculated depreciation per books using the straight-line
method. For income
tax purposes, depreciation amounted to $85,000.
8. Other expenses include premiums of $5,000 on the key-person life
insurance policy
covering Rocket’s president, who died in December.
9. Qualified production activities income is $250,000.