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11) Corporation A receives a dividend from Corporation B. Corporation A includes the dividend in...

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Accounting

11) Corporation A receives a dividend from Corporation B. Corporation A includes the dividend in its gross income for tax and financial accounting purposes (no booktax difference). Corporation A also reported the unrealized appreciation in the stock in its book but not taxable income for the year because it is holding the Corporation B stock as a trading security. If A has accounted for the dividend correctly (following the general rule), how much of B stock does A own?
A) A owns less than 20 percent of the stock of B.
B) A owns at least 20 but not more than 50 percent of the stock of B.
C) A owns more than 50 percent of the stock of B.
D) Cannot be determined.
12) Corporation A receives a dividend from Corporation B. It includes the dividend in gross income for tax purposes but includes a pro-rata portion of B's earnings in its financial accounting income. If A has accounted for the dividend correctly (using the general rule), how much of B's stock does A own?
A) A owns less than 20 percent of the stock of B.
B) A owns at least 20 but not more than 50 percent of the stock of B.
C) A owns more than 50 percent of the stock of B.
D) Cannot be determined.

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