Question 1
Indicators of possible exposure of accumulated earning tax risk would include all of the following
except◦ substantial marketable securities held by the corporation.
◦ loans to shareholders.
◦ limited dividend paying history.
◦ All of these factors could indicate retention of earnings beyond business needs.
Question 2
Major Corporation's taxable income for the current year is $335,000. Its tax liability is
◦ $84,250.
◦ $102,150.
◦ $113,900.
◦ $117,250.