9)An office desk is an example of:

A)Personal property.

B)Personal-use property.

C)Real property.

D)Business property.

E)Personal property and business property.

27)When an employee/shareholder receives a business income allocation from an S corporation, what taxes apply to the business income allocation?

A)FICA tax only.

B)Self-employment tax only.

C)FICA and self-employment tax.

D)Regular income tax.

E)None of the choices are correct.

36)Costello Corporation reported pretax book income of $500,000. During the current year, the reserve for bad debts increased by $5,000. In addition, tax depreciation exceeded book depreciation by $40,000. Finally, Costello received $3,000 of tax-exempt life insurance proceeds from the death of one of its officers. Costello's deferred income tax expense or benefit would be:

A)$7,350 net deferred tax expense.

B)$7,350 net deferred tax benefit.

C)$7,950 net deferred tax benefit.

D)$7,980 net deferred tax expense.

37)Marlin Corporation reported pretax book income of $1,000,000. During the current year, the net reserve for warranties increased by $25,000. In addition, book depreciation exceeded tax depreciation by $100,000. Finally, Marlin subtracted a dividends received deduction of $15,000 in computing its current-year taxable income. Marlin's current income tax expense or benefit would be:

A)$236,250 tax expense.

B)$233,100 tax expense.

C)$210,000 tax expense.

D)$205,800 tax expense.

39)Robinson Company had a net deferred tax liability of $34,000 at the beginning of the year, representing a net taxable temporary difference of $100,000 (taxed at 34 percent). During the year, Robinson reported pretax book income of $400,000. Included in the computation were favorable temporary differences of $50,000 and unfavorable temporary differences of $20,000. During the year, Congress reduced the corporate tax rate to 21 percent. Robinson's deferred income tax expense or benefit for the current year would be:

A)Net deferred tax benefit of $6,300.

B)Net deferred tax expense of $6,300.

C)Net deferred tax benefit of $6,700.

D)Net deferred tax expense of $6,700.

40)A valuation allowance is recorded against a deferred tax asset when:

A)It is probable that the deferred tax asset will not be realized in the future.

B)It is more likely than not that the deferred tax asset will not be realized in the future.

C)It is highly likely the deferred tax asset will not be realized in the future.

D)It is only remotely possible that the deferred tax asset will not be realized in the future