ACCT 3101 WEEK 5 QUIZ LATEST-BROOKLYN
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ACCT 3101 Week 5 Quiz Latest-Brooklyn
ACCT3101
ACCT 3101 Week 5 Quiz Latest-Brooklyn
ACCT3101 Income Taxation
Question 1. Indifferent between
investing in a city of El Paso bond that pays 3.4% interest and a corporate
bond that pays 5.1% interest. What is Javier’s marginal tax rate?
53.33%
33.33%
43.33%
100%
None of the choices are correct.
Question 2. LeBron received $50,000
of compensation from his employer and he received $400 of interest from a
municipal bond. What is the amount of Lebron’s gross income from these items?
$0.
$50,400.
$50,000.
$400.
Question 3. Madison’s gross tax
liability is $10,950. Madison had $5,160 of tax credits available and she had
$10,050 of taxes withheld by her employer. What is Madison’s taxes due (or
taxes refunded) with her tax return?
$0 taxes due and $0 tax refund.
$5,790 taxes due.
$900 taxes due.
$4,260 tax refund.
Question 4. If Tom invests $80,000 in
a taxable corporate bond that provides a 7 percent before-tax return, how much
will Tom’s investment be worth in either 8 or 20 years from now when the bond
matures? Assume Tom’s marginal tax rate is 35 percent.
$137,455; $309,575.
$116,330; $202,758.
$114,204; $194,792.
$129,491; $259,456.
None of the choices are correct.
Question 5. The Statements on
Standards for Tax Services (SSTS) and Code of Professional Conduct provide
professional standards for tax professionals and were issued by which of the
following organizations?
AICPA
U.S. Treasury
Congress
IRS
Question 6. married but files
separately, earns $170,000 of taxable income. He also has $14,750 in city of
Tulsa bonds. His wife, Theresa, earns $49,500 of taxable income.
If Leonardo instead had $55,500 of additional tax deductions for
year 2016, his marginal tax rate on the deductions would be: (Tax rate
schedules)
rev: 10_06_2016_QC_CS-63159
32.89%
32.45%
35.45%
None of the choices are correct.
24.15%
Question 7. Which of the following
statements regarding tax deductions is false?
Taxpayers are not entitled to any deductions unless specific
provisions in the tax code allow the deductions.
The standard deduction is a from AGI deduction.
Deductions can be labeled as deductions above the line or
deductions below the line.
From AGI deductions tend to be associated with business
activities while for AGI deductions tend to be associated with personal
activities.
Supreme Court case
Tax Law Review article
Regulation
Internal Revenue Code
None of the choices are correct.
Question 9. Purchased an annuity that
provides $13,600 quarterly payments for the next 11 years. The annuity was
purchased at a cost of $365,200. How much of the first quarterly payment will
Fran include in her gross income?
$35,673
$13,600
$8,300
$5,300
None of the choices are correct.
Question 10. Maren received 10 NQOs
(each option gives her the right to purchase 12 shares of stock for $9 per
share) at the time she started working the stock price was $6 per share. When
the share price was $14 per share, she exercised all of her options. Eighteen
months later she sold all of the shares for $20 per share. What is the amount
of Maren’s bargain element?
$960.
$0.
$1,680.
None of the choices are correct.
$600.
Question 11. Bernie is a former
executive who is retired. This year Bernie received $254,000 in pension
payments and $14,000 of social security payments. What amount must Bernie include
in his gross income?
Zero
$261,000
$265,900
$268,000
$254,000
Question 12. Manny, a single taxpayer,
earns $82,500 per year in taxable income and an additional $8,750 per year in
city of Boston bonds.
If Manny earns an additional $12,500 in taxable income in year
2016, what is his marginal tax rate on this income? (Tax rate schedules)
rev: 10_06_2016_QC_CS-63159
None of the choices are correct.
25.92%.
25.13%.
28.13%.
22.3%.
Question 13. Which of the following
has the highest authoritative weight?
Revenue Ruling
Regulation
Internal Revenue Code
Private Letter Ruling
Revenue Procedure
Question 14. Sally received $57,900 of
compensation from her employer and she received $650 of interest from a
corporate bond. What is the amount of Sally’s gross income from these items?
$58,550.
$650.
$57,900.
$0.
Question 15.
Jack and Jill are married. This year Jack earned $79,500 and
Jill earned $87,500 and they received $5,500 of interest income from a joint
savings account. How much gross income would Jack report if he files
married-separate from Jill?
None of the choices are correct.
$85,000 if they reside in a community property law state.
$86,250 if they reside in a community property law state.
$79,500 if they reside in a common law state.
$93,000 if they reside in a common law state.
Question 16. Taxpayer, earns $79,500
per year in taxable income and an additional $13,250 per year in city of Boston
bonds.
What is Manny’s current marginal tax rate for year 2016? (Tax
rate schedules)
rev: 08_12_2016_QC_CS-63159, 10_13_2016_QC_CS-63159
21.79%
21.93%
14.99%
17.82%
25.00%
Question 17. Marginal tax rate is 20%.
If corporate bonds pay 6% interest, what interest rate would a municipal bond
have to offer for Bill to be indifferent between the two bonds?
None of the choices are correct
7.20%
20%
6%
5%
Question 18. Taxpayer, earns $135,000
in taxable income and $3,100 in interest from an investment in city of
Birmingham Bonds. Using the U.S. tax rate schedule for year 2016, how much
federal tax will he owe? (Tax rate schedules)
$35,043
None of the choices are correct.
$32,418
$30,836.75
$29,375.5
Question 19. Which of the following
committees is not involved in enacting tax legislation?
Senate Finance Committee
House Ways and Means Committee
House Tax Committee
Joint Conference Committee
Question 20. Leonardo, who is married
but files separately, earns $70,000 of taxable income. He also has $5,750 in
city of Tulsa bonds. His wife, Theresa, earns $31,500 of taxable income.
If Leonardo earned an additional $33,500 of taxable income this
year, what would be the marginal tax rate on the extra income for year 2016?
(Tax rate schedules)
rev: 10_06_2016_QC_CS-63159
27.47%
24.47%
16.97%
None of the choices are correct.
27.22%
Question 21. Joanna received $68,400
compensation from her employer, the value of her stock in ABC company
appreciated by $8,600 during the year (but she did not sell any of the stock),
she received $44,400 of life insurance proceeds from the death of her husband.
What is the amount of Joanna’s gross income from these items?
$77,000.
$112,800.
$68,400.
$121,400.
References
Question 22. If Lucy earns a 6% after-tax
rate of return, $19,000 received in four years is worth how much today? Use
Exhibit 3.1. (Round present and future value factor(s) to 3 decimal places.)
$15,048.
$17,884.
$19,000.
$20,649.
None of the choices are correct.
Question 23. Ben’s employer offers employees
the following benefits. What amount must Ben include in his gross income?
Benefit
Value
Health insurance coverage
$
5,460
Group term life insurance ($50,000)
4,355
Disability insurance coverage (considered purchased by Ben)
3,770
Whole life insurance coverage ($100,000)
7,340
$11,110
$9,230
$7,340
Zero – none of the above benefits is included in gross income
11695
Question 24. Assume that Shavonne’s marginal
tax rate is 30% and her tax rate on dividends is 20%. If a corporate bond pays
8.8% interest, what dividend yield would a dividend-paying stock (with no
growth potential) have to offer for Shavonne to be indifferent between the two
investments from a cash-flow perspective?
20%
8.7%
None of the choices are correct.
8.8%
7.7%
References
Multiple Choice Difficulty: 2 Medium Learning Objective: 03-05
Apply the conversion strategy, provide examples, and describe its limitations.
Check my work
Question 25. Jamison’s gross tax liability
is $9,500. Jamison had $2,400 of available credits and he had $6,150 of taxes
withheld by his employer. What is Jamison’s taxes due (or taxes refunded) with
his tax return?
$7,100 taxes due.
$950 taxes due.
$3,350 taxes due.
$950 tax refund.
Question 26. If Nicolai earns an 10%
after-tax rate of return, $14,000 today would be worth how much to Nicolai in 5
years? Use Exhibit 3.1. (Round present and future value factor(s) to 5 decimal
places.)
$14,000.
$8,701.
$12,728.
$22
547.
$15,400.
Question 27. Which of the following items is
most commonly used to check the status of a court case?
Revenue ruling
Tax digest
Determination letter
Citator
Private letter ruling
Question 28.
Shaun is a student who has received an academic scholarship to
State University. The scholarship paid $14,100 for tuition, $2,550 for fees,
and $1,125 for books. In addition, Shaun’s dormitory fees of $8,625 were paid
by the University when he agreed to counsel freshman on campus living. What amount
must Shaun include in his gross income?
$2,550
Zero – none of the above benefits is included in gross income
$9,750
$8,625
$11,175
Question 29. Opal deducted $2,440 of state
income taxes on her tax return last year. This year she received a state income
tax refund of $210. What amount of the refund, if any, should Opal include in
her gross income if last year her total itemized deductions exceeded the
standard deduction by $370?
$370
$2,070
None of the choices are correct – refunds of state income taxes
are not included in gross income.
$210
$160
References
Multiple Choice Difficulty: 2 Medium Learning Objective: 05-01
Apply the concept of realization and explain when taxpayers recognize gross
income.
Question 30.
All of the following are for AGI deductions except:
Charitable contributions.
Business expenses for a self-employed taxpayer.
Moving expenses.
Rental and royalty expenses.
References
Multiple Choice Difficulty: 2 Medium Learning Objective: 04-01
Describe the formula for calculating an individual taxpayer’s taxes payable or
refund and generally explain each formula component.
Check my work
Question 31.
Assume that Lucas’ marginal tax rate is 10% and his tax rate on
dividends is 5%. If a dividend-paying stock (with no growth potential) pays an
8.8% dividend yield, what interest rate would a municipal bond have to offer
for Lucas to be indifferent between the two investments from a cash-flow
perspective?
8.36%
5%
None of the choices are correct.
8.8%
10%
References
Multiple Choice Difficulty: 2 Medium Learning Objective: 03-05
Apply the conversion strategy, provide examples, and describe its limitations.
Question 32.
Interest payments this year. What amount must Mike include in
his gross income (for federal tax purposes)?
Bond
Interest
General Motors
$
2,250
City of New York
1,700
State of New Jersey
2,000
U.S. Treasury
1,650
$3,900
$5,900
$3,650
$3,950
$4,250
Question 33.
Marc, a single taxpayer, earns $99,000 in taxable income and
$3,100 in interest from an investment in city of Birmingham Bonds. Using the
U.S. tax rate schedule for year 2016, what is his current marginal tax rate?
(Tax rate schedules)
None of the choices are correct.
28.00%
25.00%
33.00%
15.00%
References
Multiple Choice Difficulty: 1 Easy Learning Objective: 01-03
Describe the different tax rate structures and calculate a tax.
Check my work
Question 34.
The income tax base for an individual tax return is:
Adjusted gross income.
Gross income.
Adjusted gross income minus from AGI deductions.
Realized income from whatever source derive
Question 35.
If Julius has a 15% tax rate and a 9% after-tax rate of return,
$44,500 of income in three years will cost him how much tax in today’s dollars?
Use Exhibit 3.1. (Round present and future value factor(s) to 3 decimal
places.)
$5,153.
None of the choices are correct.
$34,354.
$6,675.
$44,500.
References
Multiple Choice Learning Objective: 03-02 apply the timing
strategy and describe its applications and limitations.
Difficulty: 2 Medium Learning Objective: 03-03 Apply the concept
of present value to tax planning.
Check my work
Question 36.
Geronimo files his tax return as a head of household for year
2016. If his taxable income is $253,500, what is his average tax rate? (Tax
rate schedules)
25.05%
27.10%
32.94%
None of the choices are correct.
26.18%
Question 37.
Compensation from his employer and he received $570 of interest
from a municipal bond. What is the amount of LeBron’s gross income from these
items?
$570.
$52,500.
$53,070.
$0.
Question 38.
Which of the following is a type of common tax service used in
tax research?
Annotated tax service
Antiquated tax service
Analytical tax service
Technical tax service
All of the choices are correct.
Question 39.
Which of the following is a type of common tax service used in
tax research?
Annotated tax service
Antiquated tax service
Analytical tax service
Technical tax service
All of the choices are correct.
Question 40.
Leonardo earns $95,000 of taxable income. He also has $8,000 in
city of Tulsa bonds. His wife, Theresa, earns $46,000 of taxable income.
What is Leonardo and Theresa’s effective tax rate for year 2016?
(Tax rate schedules)
17.98%
16.37%
19.9%
22.52%
29.37%
Question 40.
Assume that Lavonia’s marginal tax rate is 20%. If a city of
Tampa bond pays 6% interest, what interest rate would a corporate bond have to
offer for Lavonia to be indifferent between the two bonds?
9.00%
5.00%
8.00%
20.00%
7.50%.
Question 41.
Rhett made his annual gambling trip to Uwin Casino. On this trip
Rhett won $390 at the slots and $1,340 at poker. Also this year, Rhett made
several trips to the race track, but he lost $770 on his various wagers. What
amount must Rhett include in his gross income?
$390
$1,340
$1,730
$960
Zero – gambling winnings are not included in gross income
Question 42.
Marc, a single taxpayer, earns $30,000 in taxable income and
$1,000 in interest from an investment in city of Birmingham Bonds. Using the
U.S. tax rate schedule for year 2016, what is his effective tax rate? (Tax rate
schedules)
None of the choices are correct.
19.49%
10.75%
21.41%
13.02
Question 43.
If Joel earns a 8% after-tax rate of return, $21,000 received in
two years is worth how much today? Use Exhibit 3.1. (Round present and future
value factor(s) to 3 decimal places.)
$21,000.
$19,410.
$17,997.
$22,680.
None of the choices are correct.
Question 44.
Which of the following is not an itemized deduction?
Charitable contributions.
Real estate taxes.
Alimony paid.
Medical expenses.
Question 45.
If Susie earns $775,000 in taxable income, how much tax will she
pay as a single taxpayer for year 2016? (Tax rate schedules)
$279,658.85
$253,453.75
$262,200.9
None of the choices are correct.
$263,069.95
Question 46.
Samantha was ill for four months this year. Samantha missed work
during this period, but disability insurance paid $19,800 of disability pay to
replace her missed salary. Samantha shares the cost of the insurance with her
employer. This year Samantha’s employer paid $2,800 in disability premiums for
Samantha as a nontaxable fringe benefit and Samantha paid the remaining $1,400
of premiums from her salary. What amount of the disability pay must Samantha
include in her gross income (Rounded to the nearest whole dollar)?
$13,200
$7,700
$19,800
$1,400
Question 47.
Curtis invests $825,000 in a city of Athens bond that pays
10.25% interest. Alternatively, Curtis could have invested the $825,000 in a
bond recently issued by Initech, Inc. that pays 13% interest with similar risk
as the city of Athens bond. Assume that Curtis’s marginal tax rate is 28%.
How much explicit tax would Curtis incur on interest earned on
the Initech, Inc. bond?
$30,030
$60,885
$77,220
$23,677.5
None of the choices are correct.
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