WGU D557 OBJECTIVE ASSESSMENT FINAL NEWEST
2026 ACTUAL EXAM TEST BANK| D557
CORPORATION TAXATION OA FINAL REVIEW WITH
COMPLETE 300 REAL EXAM QUESTIONS AND
CORRECT VERIFIED ANSWERS/ ALREADY GRADED
A+ (MOST RECENT!!)
On December 27, 2010, Hannah, Diego, and Alliah formed a new C
corporation, per Section 1202. Hannah invested $300,000, Diego
invested $200,000, and Alliah Company invested $500,000. In 2022,
Alliah Company sold all their shares for $50 million.
What is the taxable gain for Alliah for the sale of their shares?
1. $39,500,000
2. $40,000,000
3. $44,500,000
4. $49,500,000 - Correct Answer - 4. $49,500,000 ($50,000,000-Basis
$500,000)
A publicly held C corporation paid its principal executive officer (PEO)
a salary of $1.2 million, its principal financial officer (PFO) $900,000,
and its three other most highly compensated officers an average of $1.1
million each in the current tax year. Additionally, the corporation
contributed $300,000 to retirement plans and $200,000 to healthcare
benefits for these officers.
What is the maximum deductible amount for these compensations by the
C corporation in the current year considering Section 162(m)?
pg. 1
,1. $1.0 million
2. $3.2 million
3. $4.9 million
4. $5.4 million - Correct Answer - 3. $4.9 million
An aeronautics corporation donated a piece of land to a local university
this year. The company purchased the land three years ago for $80,000.
At the time of donation, the land's fair market value was $130,000.
What is the amount considered to measure the corporation's charitable
contribution deduction?
1. $50,000
2. $80,000
3. $130,000
4. $210,000 - Correct Answer - 3. $130,000
A pharmaceutical company owns a 30% stake in an apparel
manufacturing company and received $50,000 as dividends from the
company. The pharmaceutical company's taxable income before
accounting for the dividends received is $300,000. The corporate tax rate
is 21%, and the pharmaceutical company does not have any net
operating loss for the current year.
What is the pharmaceutical company's taxable income after considering
the dividends received deduction?
1. $237,000
pg. 2
,2. $250,000
3. $267,500
4. $300,000 - Correct Answer - 3. $267,500
A corporation has the following income and expenses in the current
year:
Income from operations$200,000
Expenses from operations$120,000
Charitable contributions$18,000
Dividends received$25,000
Net operating loss carryback $30,000
What is the corporation's allowable charitable deduction?
1. $8,000
2. $10,500
3. $12,000
4. $18,000 - Correct Answer - 2. $10,500
A C corporation reports a net income of $60,000,000 in its audited
financial statement, which includes $10,000,000 net income from its
Canadian subsidiary, which is not consolidated for tax purposes.
How much will the CFO report as the net income per income statement
of includible corporations for the C corporation?
1. $10,000,000
pg. 3
, 2. $50,000,000
3. $60,000,000
4. $70,000,000 - Correct Answer - 2. $50,000,000
A C corporation begins the year with unappropriated retained earnings
of $300,000. During the year, the corporation reports a net income of
$120,000 in its books and distributes a cash dividend of $50,000.
What is the corporation's ending balance in unappropriated retained
earnings for the year?
1. $230,000
2. $370,000
3. $420,000
4. $470,000 - Correct Answer - 2. $370,000
A C corporation, which is in the manufacturing industry, reports retained
earnings of $400,000 for the current year, out of which $200,000 is
reserved for the replacement of equipment and the remainder for
immediate business needs.
What is the C corporation's accumulated earnings tax liability?
1. $0
2. $10,000
3. $20,000
4. $30,000 - Correct Answer - 1. $0
pg. 4
2026 ACTUAL EXAM TEST BANK| D557
CORPORATION TAXATION OA FINAL REVIEW WITH
COMPLETE 300 REAL EXAM QUESTIONS AND
CORRECT VERIFIED ANSWERS/ ALREADY GRADED
A+ (MOST RECENT!!)
On December 27, 2010, Hannah, Diego, and Alliah formed a new C
corporation, per Section 1202. Hannah invested $300,000, Diego
invested $200,000, and Alliah Company invested $500,000. In 2022,
Alliah Company sold all their shares for $50 million.
What is the taxable gain for Alliah for the sale of their shares?
1. $39,500,000
2. $40,000,000
3. $44,500,000
4. $49,500,000 - Correct Answer - 4. $49,500,000 ($50,000,000-Basis
$500,000)
A publicly held C corporation paid its principal executive officer (PEO)
a salary of $1.2 million, its principal financial officer (PFO) $900,000,
and its three other most highly compensated officers an average of $1.1
million each in the current tax year. Additionally, the corporation
contributed $300,000 to retirement plans and $200,000 to healthcare
benefits for these officers.
What is the maximum deductible amount for these compensations by the
C corporation in the current year considering Section 162(m)?
pg. 1
,1. $1.0 million
2. $3.2 million
3. $4.9 million
4. $5.4 million - Correct Answer - 3. $4.9 million
An aeronautics corporation donated a piece of land to a local university
this year. The company purchased the land three years ago for $80,000.
At the time of donation, the land's fair market value was $130,000.
What is the amount considered to measure the corporation's charitable
contribution deduction?
1. $50,000
2. $80,000
3. $130,000
4. $210,000 - Correct Answer - 3. $130,000
A pharmaceutical company owns a 30% stake in an apparel
manufacturing company and received $50,000 as dividends from the
company. The pharmaceutical company's taxable income before
accounting for the dividends received is $300,000. The corporate tax rate
is 21%, and the pharmaceutical company does not have any net
operating loss for the current year.
What is the pharmaceutical company's taxable income after considering
the dividends received deduction?
1. $237,000
pg. 2
,2. $250,000
3. $267,500
4. $300,000 - Correct Answer - 3. $267,500
A corporation has the following income and expenses in the current
year:
Income from operations$200,000
Expenses from operations$120,000
Charitable contributions$18,000
Dividends received$25,000
Net operating loss carryback $30,000
What is the corporation's allowable charitable deduction?
1. $8,000
2. $10,500
3. $12,000
4. $18,000 - Correct Answer - 2. $10,500
A C corporation reports a net income of $60,000,000 in its audited
financial statement, which includes $10,000,000 net income from its
Canadian subsidiary, which is not consolidated for tax purposes.
How much will the CFO report as the net income per income statement
of includible corporations for the C corporation?
1. $10,000,000
pg. 3
, 2. $50,000,000
3. $60,000,000
4. $70,000,000 - Correct Answer - 2. $50,000,000
A C corporation begins the year with unappropriated retained earnings
of $300,000. During the year, the corporation reports a net income of
$120,000 in its books and distributes a cash dividend of $50,000.
What is the corporation's ending balance in unappropriated retained
earnings for the year?
1. $230,000
2. $370,000
3. $420,000
4. $470,000 - Correct Answer - 2. $370,000
A C corporation, which is in the manufacturing industry, reports retained
earnings of $400,000 for the current year, out of which $200,000 is
reserved for the replacement of equipment and the remainder for
immediate business needs.
What is the C corporation's accumulated earnings tax liability?
1. $0
2. $10,000
3. $20,000
4. $30,000 - Correct Answer - 1. $0
pg. 4
