During the current year, Swallow Corporation, a calendar year C corporation, has the following transactions. Income from operations Expenses from operations Dividends received from Brown Corporation $660,000 760,000 240,000 Click here to view the dividend received deduction table. a. Swallow Corporation owns 12% o Brown Corporation's stock. Swallow s taxable income deduction is after deducting the dividends received 70,000 Feedback after deducting the dividends b. Assume instead that Swallow Corporation owns 26% of Brown Corporation's stock. Swallows NOL received deduction is s EXHIBIT 3.2 Dividends Received Deduction Percentage of Ownership by Corporate Shareholder Less than 20% 20% or more (but less than 80%) 80% or more. The payor corporation must be a member of an affiliated group with the recipient corporation Deduction Percentage 50% 65% 1006

For each of the following situations, indicate whether you agree or disagree with the financial reporting practice employed and state the basic assumption, component, or accounting principle that is applied (if you agree) or violated (if you disagree).wagner corporation adjusted the valuation of all assets and liabilities to reflect changes in the purchasing power of the dollar. spooner oil company changed its method of accounting for oil and gas exploration costs from successful efforts to full cost. no mention of the change was included in the financial statements. the change had a material effect on spooner's financial statements. cypress manufacturing company purchased machinery having a five-year life. the cost of the machinery is being expensed over the life of the machinery. rudeen corporation purchased equipment for $180,000 at a liquidation sale of a competitor. because the equipment was worth $230,000, rudeen valued the equipment in its subsequent balance sheet at $230,000.davis bicycle company received a large order for the sale of 1,000 bicycles at $100 each. the customer paid davis the entire amount of $100,000 on march 15. however, davis did not record any revenue until april 17, the date the bicycles were delivered to the customer. gigantic corporation purchased two small calculators at a cost of $32.00. the cost of the calculators was expensed even though they had a three-year estimated useful life. esquire company provides financial statements to external users every three years.