A Cash Basis Calendar Year C Corporation Reports $100,000 of Accounts

Multiple Choice

A cash basis calendar year C corporation reports $100,000 of accounts receivable on the date of its conversion to S status on February 14. By the end of the year, $60,000 of these receivables have been collected. Calculate any built- in gains tax, assuming that there is sufficient taxable income.

A) $-0-
B) $12,600
C) $21,000
D) $35,000