Identify which of the following statements is false.
A) The IRS issues annually a revenue procedure that prescribes how a letter ruling should be requested and the information to be contained in the ruling request.
B) The request for a ruling may contain a suggested conclusion (or answer) that the taxpayer proposes that the IRS adopt in the described situation.
C) As a practical consideration, taxpayers always find it preferable to obtain an advance ruling on questionable tax situations.
D) Third parties may not cite private letter rulings as authority for the tax consequences of their transactions.
C) As a practical consideration, taxpayers always find it preferable to obtain an advance ruling on questionable tax situations.
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Kilduff Corporation's balance sheet and income statement appear below:Comparative Balance Sheet Ending BalanceBeginning BalanceAssets: Cash and cash equivalents$36 $38 Accounts receivable 36 32 Inventory 49 55 Property, plant and equipment 707 580 Less accumulated depreciation 316 315 Total assets$ 512 $ 390 Liabilities and stockholders' equity: Accounts payable$71 $64 Accrued liabilities 22 19 Income taxes payable 34 41 Bonds payable 71 100 Common stock 32 30 Retained earnings 282 136 Total liabilities and stockholders' equity$ 512 $ 390 Income StatementSales$ 1,174Cost of goods sold 771Gross margin403Selling and administrative expense 146Net operating income257Gain on sale of plant and equipment
14Income before taxes271Income taxes 81Net income$ 190The company sold equipment for $19 that was originally purchased for $10 and that had accumulated depreciation of $5. The company paid a cash dividend of $44 and it did not issue any bonds payable or repurchase any of its own common stock.The net cash provided by (used in) financing activities for the year was: A. $2 B. $(44) C. $(71) D. $(29)
The sales tax laws of many states exempt the purchase of groceries and prescription drugs from tax. Such exemptions are intended to improve the:
A. Equity of the tax B. Neutrality of the tax C. Sufficiency of the tax D. Convenience of the tax
Among the advantages for global entrepreneurs of diaspora networks is the
a. speed with which information flows across borders. b. distrust among traditional trading partners. c. creation of places where anything can happen. d. decline in political risks across ethnic communities.
As a behavior control technique, direct supervision is
A. highly motivating to employees. B. expensive and requires more managers. C. preferred over output control. D. best suited to complex jobs. E. less effective than other techniques.