1) Identify which of the following statements is true.A. A corporation that accrues compensation payable to an employee must pay the amount within two and one-half months after the close of the taxable year to deduct the amount in the year of the accrual.B. Accrued compensation that is deductible in the year of accrual is considered to be part of an IRS deferred compensation plan.C. Accrued compensation not paid within three and one-half months after the close of the corporation tax year is deducted in the year following the accrual.D. All are false.2) Island Corporation has the following income and expense items for the year.Gross receipts from sales $60000Dividends received from 15%-owned domestic corporation 40000Expenses connected with sales 30000The taxable income of Island Corporation isA. $70000B. $100000C. $42000D. $470003) Which of the following items are adjustments made to arrive at alternative minimum taxable income?A. Excess of depreciation claimed on personally acquired in the current year for taxable income purposes over that claimed for alternative minimum tax purposesB. Excess percentage depletionC. Statutory exemptionD. Tax-exempt interest income earned on private activity bonds4) Boxer Corporation buys equipment in January of the current year with a 7-year class life for $15000. The corporation expensed the $15000 under Sec. 179. The deduction in the year of purchase for E&P purposes due to the acquisition and expensing of the equipment isA. $3000B. $14000C. $15000D. $1500

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