ACCT 324 Week 4 Midterm Exam Answers
ACCT 324 Week 4 Midterm Exam Answers
ACCT 324 Week 4 Midterm Exam Answers
- Question : (TCO 9) In terms of probability, which of the following taxpayers would least likely be audited by the IRS?
- Question : (TCO 9) A characteristic of fraud penalties is:
- Question : (TCO 1) Federal tax legislation generally originates in what body?
- Question : (TCO 1) Subchapter S covers which specific area of tax law?
- Question : (TCO 11) Kyle, whose wife died in December 2009, filed a joint tax return for 2009. He did NOT remarry, but has continued to maintain his home in which his two dependent children live. What is Kyle’s filing status regarding 2012?
- Question : (TCO 11) Arnold is married to Sybil, who abandoned him in 2008. He has NOT seen or communicated with her since April of that year. He maintains a household in which their son, Evans, lives. Evans is age 25 and earns over $20,000 each year. For tax year 2011, Arnold’s filing status is:
- Question : (TCO 7) Orange Cable TV Company, an accrual basis taxpayer, allows its customers to pay by the year in advance ($350 per year), or two years in advance ($680). In September 2011, the company collected the following amounts applicable to future services:
- Question : (TCO 7) With respect to the prepaid income from services, which of the following is true?
- Question : (TCO 3) Section 119 excludes the value of meals from the employees’ gross income:
- Question : (TCO 3) Adam repairs power lines for the Egret Utilities Company. He is generally working on a power line during the lunch hour. He must eat when and where he can and still get his work done. He usually purchases something at a convenience store and eats in his truck. Egret reimburses Adam for the cost of his meals.
- Question : (TCO 10) On June 1, 2010, Irene places in service a new automobile that cost $21,000. The car is used 70% for business and 30% for personal use (Assume that this percentage is maintained for the life of the car.). She does NOT elect to take additional first-year depreciation. Determine the cost recovery deduction for 2011.
- Question : (TCO 10) Which of the following is correct?
- Question : (TCO 10) On May 2, 2011, Karen places in service a new sports utility vehicle that costs $70,000 and has a gross vehicle weight of 6,300 lbs. The vehicle is used 40% for business and 60% for personal use. Determine the cost recovery deduction for 2011.
- Question : (TCO 10) Danielle owns a vacation cottage. During the current year, she rented it for $1,500 for 48 days, and lived in it for 12 days. How would any expenses be accounted for?
- Question : (TCO 3) During the year, Rick had the following insured personal casualty losses (arising from one casualty). Rick also had $18,000 AGI for the year.
- Question : (TCO 3) John had adjusted gross income of $60,000. During the year, his personal use summer home was damaged by a fire. Pertinent data with respect to the home follows:
- Question : (TCO 3) Jim purchases a ticket for $80 for a special concert by the symphony (a qualified charity). If the price of a ticket is normally $25, what is the amount allowed as a charitable deduction?
- Question : (TCO 3) Karen, a calendar year taxpayer, made the following donations to qualified charitable organizations in the current year:
- Question : (TCO 3) This year, Ralph made the following contributions to the University of the Northwest (a qualified charitable organization):
- Question : (TCO 3) Several years ago, Joy acquired a passive activity. Until 2008, the activity was profitable. Joy’s at-risk amount at the beginning of 2008 was $250,000. The activity produced losses of $100,000 in 2008, $80,000 in 2009, and $90,000 in 2010. During the same period, no passive income was recognized. How much is suspended under the at-risk rules and the passive loss rules at the beginning of 2011?
- Question : (TCO 3) Wes’ at-risk amount in a passive activity is $25,000 at the beginning of the current year. His current loss from the activity is $35,000, and he has no passive activity income. At the end of the current year, which of the following statements is incorrect?
- Question : (TCO 2) The installment method applies to which of the following sales with payments being made in the year following the year of sale?
- Question : (TCO 2) In 2010, Helen sold property and reported her gain by the installment method. Her basis in the property was $150,000 ($250,000 cost less $100,000 of depreciation). Helen sold the property for $375,000, with $75,000 due on the date of the sale and $300,000 (plus interest at the federal rate) due in 2011. Helen’s recognized installment sale gain in 2011 is:
- Question : (TCO 2) Todd, a CPA, sold land for $200,000 plus a note for $400,000. The interest rate on the note was equal to the federal rate. The fair market value of the note was $360,000. Todd’s basis in the land was $75,000.
- Question : (TCO 2) Both economic and social considerations can be used to justify:
- Question : (TCO 3) Joe’s automobile, which was used only for business purposes, was damaged in an accident. At the date of the accident, the fair market value of the automobile was $13,000 and its adjusted basis was $7,000. After the accident, the automobile was appraised at $4,000. Calculate Joe’s loss. Is it a for or from AGI deduction?
- Question : (TCO 1) In 2010, David had the following transactions:
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ACCT 324 Week 4 Midterm Exam Answers
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