1. BlueCorporation has taxable income of $320,000. The corporation had total travel and entertainment expenses of $50,000, charitable contributions of $10,000, and tax depreciation in excess of book depreciation of $45,000. Without regard to tax expense for financial statement purposes, what is the book net income of Blue?

a. $215,000 b. $305,000 c. $340,000d.None of these

2. Pitbullowns 100% of Voli VodkaCorporation and his basis in the stock is $105,000. He receives cash of $20,000 and property with FMV of $140,000 and basis of $180,000 in complete liquidation of his ownership interest. What amount of gain or loss should Voli Vodka recognize as a result of this transaction?

a. $5,000 loss b. $15,000 gain c. $55,000 gain d. None of these

3. Lauraowns 100% of FeathersCompany. Feathershas earnings and profits of $12,000. The corporation distributes property with a basis of $9,000 and a FMV of $12,000 to Laura. She must report dividend income of:

a. $2,000 b. $9,000 c. $10,000 d. $12,000

4. Triple ACompany has earnings and profits of $30,000. The corporation distributes property with a basis of $40,000 and a FMV of $35,000 to Jack, its sole shareholder. Hisbasis in the stock is $30,000. Which of the following statements is correct?

a. Jackreports a nontaxable return of capital of $15,000

b. Jack reports dividend income of $35,000

c. Triple A Company records a loss of $5,000

d. None of these statements are correct.