ACC330_Exam3
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ACC330_Exam3

Course Number: ACC 330, Spring 2011

College/University: S. Alabama

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ACCOUNTING 330 - EXAM III - PART I - SPRING 2011 Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. Grape Corporation purchased a machine in December of the current year. This was the only asset purchased during the current year. The machine was placed in service in February of the following year. No assets were purchased in the following year. Grape Corporations...

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330 ACCOUNTING - EXAM III - PART I - SPRING 2011 Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. Grape Corporation purchased a machine in December of the current year. This was the only asset purchased during the current year. The machine was placed in service in February of the following year. No assets were purchased in the following year. Grape Corporations cost recovery would begin: a. In the current year using a mid-quarter convention. b. In the current year using a half-year convention. c. In the following year using a mid-quarter convention. d. In the following year using a half-year convention.** e. None of the above. 2. On June 1 of the current year, Tab converted a machine from personal use to rental property. At the time of the conversion, the machine was worth $90,000. Five years ago Tab purchased the machine for $70,000. The machine is still encumbered by a $50,000 mortgage. What is the basis of the machine for cost recovery? a. $70,000. b. $90,000. c. $120,000. d. $140,000. e. None of the above. 3. Tara purchased a machine for $40,000 to be used in her business. The cost recovery allowed and allowable for the three years the machine was used are as follows: Year 1 Year 2 Year 3 Cost Recovery Allowed $16,000 9,600 5,760 Cost Recovery Allowable $ 8,000 12,800 7,680 ____ ____ If Tara sells the machine after three years for $15,000, how much gain should she recognize? a. $3,480. b. $6,360. c. $9,240. d. $11,480. e. None of the above. ____ 4. Hazel purchased a new business asset (five-year property) on November 30, 2010, at a cost of $100,000. This was the only asset acquired by Hazel during 2010. On January 7, 2011, Hazel placed the asset in service. She did not elect to expense any of the asset cost under 179, nor did she elect straight-line cost recovery. If Congress reenacts additional first-year depreciation for 2010, Hazel did elect not to take additional first-year depreciation. On October 25, 2012, Hazel sold the asset. Determine the cost recovery for 2012. a. $9,600. b. $16,000. c. $26,000. d. $38,000. e. None of the above. ____ 5. James purchased a new business asset (three-year personalty) on July 23, 2010, at a cost of $50,000. He did not elect to expense any of the asset under 179, nor did he elect straight-line cost recovery. If Congress reenacts additional first-year depreciation for 2010, James did elect not to take additional first-year depreciation. Determine the cost recovery deduction for 2010. a. $8,333. b. $16,665. c. $33,333. d. $41,665. e. None of the above. 6. Alice purchased office furniture on September 20, 2010, for $100,000. On October 10, she purchased business computers for $80,000. Alice did not elect to expense any of the assets under 179, nor did she elect straight-line cost recovery. If Congress reenacts additional first-year depreciation for 2010, Alice does elect not to take additional first-year depreciation. Determine the cost recovery deduction for the business assets for 2010. a. $6,426. b. $14,710. c. $25,722. d. $30,290. e. None of the above. 7. Barry purchased a used business asset (seven-year property) on November 30, 2010, at a cost of $200,000. This is the only asset he purchased during the year. Barry did not elect to expense any of the asset under 179, nor did he elect straight-line cost recovery. Barry sold the asset on July 17, 2011. Determine the cost recovery deduction for 2011. a. $19,133. b. $24,490. c. $34,438. d. $55,100. e. None of the above. 8. Carlos purchased an apartment building on November 16, 1989, for $1,000,000. Determine the cost recovery for 2010. a. $36,360. b. $32,100. c. $45,500. d. $331,850. e. None of the above. 9. Diane purchased a factory building on November 15, 1993, for $5,000,000. She sells the factory building on February 2, 2010. Determine the cost recovery deduction for the year of the sale. a. $16,025. b. $19,844. c. $26,458. d. $158,750. e. None of the above. ____ ____ ____ ____ ____ 10. On February 20, 2010, Susan paid $200,000 for a unique leasehold improvement to an office building that she is going to lease to John. The lease will begin on June 1, 2010, and terminate on May 31, 2025. At the termination of the lease, the improvement will be worthless. Determine Susans deductible loss as a result of the termination of the lease. a. $0. b. c. d. e. $123,503. $127,990. $128,631. None of the above. ____ 11. Augie purchased one used asset during the year (five-year property) on November 10, 2010, at a cost of $400,000. She made the 179 election. The income from the business before the cost recovery deduction and the 179 deduction was $100,000. Determine the total cost recovery deduction with respect to the asset for 2010. a. $7,500. b. $92,500. c. $100,000. d. $250,000. e. None of the above. ____ 12. In 2009, Gail had a 179 deduction carryover of $15,000. In 2010, she elected 179 for an asset acquired at a cost of $115,000. Gails 179 business income limitation for 2010 is $127,000. Determine Gails 179 deduction for 2010. a. $15,000. b. $115,000. c. $128,000. d. $130,000. e. None of the above. ____ 13. The only asset Bill purchased during 2010 was a new seven-year class asset. The asset, which was listed property, was acquired on June 17 at a cost of $50,000. The asset was used 40% for business, 30% for the production of income, and the rest of the time for personal use. Bill always elects to expense the maximum amount under 179 whenever it is applicable. The net income from the business before the 179 deduction is $100,000. Determine Bills maximum deduction with respect to the property for 2010. a. $1,428. b. $2,499. c. $26,749. d. $33,375. e. None of the above. ____ 14. 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 this percentage is maintained for the life of the car.) If Congress reenacts additional first-year depreciation for 2010, she does elect not to take additional first-year depreciation. Determine the cost recovery deduction for 2011. a. $3,060. b. $3,290. c. $3,430. d. $6,720. e. None of the above. ____ 15. During the past two years, through extensive advertising and improved customer relations, Orange Corporation estimated that it had developed customer goodwill worth $500,000. For the current year, determine the amount of goodwill Orange Corporation may amortize. a. $16,667. b. $26,667. c. $33,333. d. $100,000. e. None of the above. ____ 16. On November 1, 2010, Red Corporation purchased an existing business. With respect to the acquired assets of the business, Red allocated $500,000 of the purchase price to a patent. The patent will expire in seven years. Determine the total amount that Red may amortize for 2010 for the patent. a. $0. b. $5,556. c. $33,333. d. $500,000. e. None of the above. ____ 17. Orange Corporation begins business on April 2, 2010. The corporation has startup expenditures of $54,000. If Orange Corporation elects 195, determine the total amount that Orange may deduct in 2010. a. $1,000. b. $2,650. c. $3,650. d. $5,000. e. None of the above. ____ 18. Corey performs services for Sophie. Which, if any, of the following factors indicate that Corey is an independent contractor, rather than an employee? a. Corey sets the work schedule. b. Sophie provides the tools used. c. Corey files a Form 2106 with his Form 1040. d. Corey is paid by the hour. e. None of the above. ____ 19. A worker may prefer to be classified as an employee (rather than an independent contractor) for which of the following reasons: a. To avoid the self-employment tax. b. To claim unreimbursed work-related expenses as a deduction for AGI. c. To avoid the cutback adjustment on unreimbursed business entertainment expenses. d. To avoid the 2%-of-AGI floor on unreimbursed work-related expenses. e. None of the above. ____ 20. Amy works as an auditor for a large major CPA firm. During the months of September through November of each year, she is permanently assigned to the team auditing Garnet Corporation. As a result, every day she drives from her home to Garnet and returns home after work. Mileage is as follows: Home to office Home to Garnet Office to Garnet Miles 10 30 35 For these three months, Amys deductible mileage for each workday is: a. 0. b. 30. c. 35. d. 60. e. None of the above. ____ 21. Bill is the regional manager for a national chain of auto-parts stores and is based in Salt Lake City. When the company opens new stores in Boise, Bill is given the task of supervising their initial operation. For three months, he works weekdays in Boise and returns home on weekends. He spends $410 returning to Salt Lake City but would have spent $390 had he stayed in Boise for the weekend. As to the weekend trips, how much, if any, qualifies as a deduction? a. $0, since the trips are personal and not work related. b. $0, since Bills tax home has changed from Salt Lake City to Boise. c. $390. d. $410. e. None of the above. ____ 22. During the year, Walt went from Louisville to Hawaii on business. Preceding a five-day business meeting, he spent four days vacationing at the beach. Excluding the vacation costs, his expenses for the trip are: Air fare Lodging Meals Entertainment Presuming no reimbursement, deductible expenses are: a. $5,500. b. $4,800. c. $3,900. d. $3,200. e. None of the above. ____ 23. During the year, Peggy from went Nashville to Quito (Ecuador) on business. She spent four days on business, two days on travel, and four days on vacation. Disregarding the vacation costs, Peggys unreimbursed expenses are: Air fare Lodging Meals Entertainment Peggys deductible expenses are: a. $2,500. b. $2,800. c. $3,100. d. $4,300. e. None of the above. ____ 24. Due to a merger, Allison transfers from Miami to Chicago. Under a new job description, she is reclassified from employee to independent contractor status. Her moving expenses, which are not reimbursed, are as follows: Transportation Meals Lodging Cost of moving household goods Penalty for breaking lease on Miami apartment $1,400 400 500 4,000 3,000 $3,000 800 600 400 $3,200 900 800 600 Allisons deductible moving expense is: a. $0. b. $5,900. c. $6,100. d. $8,900. e. $9,300. ____ 25. Carolyn is single and has a college degree in finance. She is employed as a loan officer at a bank; her yearly AGI approximates $50,000. During 2010, she enrolled in a weekend MBA program and incurred the following nonreimbursed expenses: $3,900 (tuition), $300 (books), $200 (other school supplies), and $200 (transportation to and from campus). Disregarding the 2%-of-AGI limitation, as to the MBA program, Carolyn has a: a. Deduction for and deduction from AGI of $0. b. Deduction for AGI of $3,900 and deduction from AGI of $700. c. Deduction for AGI of $4,000 and deduction from AGI of $600. d. Deduction for AGI of $4,100 and deduction from AGI of $500. e. None of the above. ____ 26. Henry entertains several of his key clients on January 1 of the current year. Expenses paid by Henry are as follows: Cab fare Cover charge at supper club Dinner at club Tips to waiter Presuming proper substantiation, Henrys deduction is: a. $1,220. b. $740. c. $640. d. $610. e. None of the above. ____ 27. Elaine, the regional sales director for a manufacturer of exercise equipment, pays $2,500 to rent a skybox for a visiting performance of the Harlem Globetrotters. The skybox holds 10 seats, and Elaine invites 7 clients to the event. Nonluxury seats range in price from $80 to $120. The refreshments provided during the event cost $600. If Elaine meets all of the requirements for deductibility (i.e., business discussion, substantiation), she may deduct: a. $1,550. b. $1,500. c. $1,260. d. $1,100. e. $900. ____ 28. Which of the following expenses, if any, qualify as deductible? a. Contributions to a Coverdell Education Savings Account (CESA). b. Contributions to a qualified tuition program ( 529 plan). c. Job hunting expense of FBI agent who applies for the job of city manager of Beaumont (TX). d. Contribution to H.R. 10 plan. e. None of the above. $ 60 200 800 160 ____ 29. One of the tax advantages of being self-employed (rather than being an employee) is: a. The self-employment tax is lower than the Social Security tax. b. The cutback adjustment does not apply. c. Job-related expenses are deductions for AGI. d. The actual cost method for deducting the business use of an automobile can be selected. e. A deduction for an office in the home is available. ____ 30. Nancy had an accident while skiing on vacation. She sustained facial injuries that required cosmetic surgery. While having the surgery done to restore her appearance, she had additional surgery done to reshape her nose, which was not injured in the accident. The surgery to restore her appearance cost $12,000 and the surgery to reshape her nose cost $5,000. How much of Nancys surgical fees will qualify as a deductible medical expense (before application of the 7.5% limitation)? a. $0. b. $5,000. c. $12,000. d. $17,000. e. None of the above. ____ 31. Rosita is employed as a systems analyst. For calendar year 2010, she had AGI of $120,000 and paid the following medical expenses: Medical insurance premiums Doctor and dentist bills for Jos and Carmen (Rositas parents) Doctor and dentist bills for Rosita Prescribed medicines for Rosita Nonprescribed insulin for Rosita $3,900 8,250 6,750 300 825 Jos and Carmen would qualify as Rositas dependents except that they file a joint return. Rositas medical insurance policy does not cover them. Rosita filed a claim for $3,150 of her own expenses with her insurance company in December 2010 and received the reimbursement in January 2011. What is Rositas maximum allowable medical expense deduction for 2010? a. $2,775. b. $11,025. c. $17,325. d. $17,775. e. None of the above. ____ 32. In 2010, Barry pays a $3,000 premium for high-deductible medical insurance for himself and his family. In addition, he contributes $2,600 to a Health Savings Account. Which of the following statements is true? a. If Barry is self-employed, he may deduct $5,600 as a deduction for AGI. b. If Barry is self-employed, he may deduct $2,600 as a deduction for AGI and may include the $3,000 premium when calculating his itemized medical expense deduction. c. If Barry is an employee, he may deduct $5,600 as a deduction for AGI. d. If Barry is an employee, he may include $5,600 when calculating his itemized medical expense deduction. e. None of the above. ____ 33. During 2010, Sam, a self-employed individual, paid the following amounts: Real estate tax on residence State income tax $3,900 1,400 Real estate taxes on land in Canada (held as an investment) State sales taxes State occupational license fee Personal property tax on value of his automobile What amount can Sam claim as taxes in itemizing deductions from AGI? a. $6,600. b. $6,950. c. $7,200. d. $8,600. e. None of the above. 900 1,950 250 200 ____ 34. In Shelby County, the real property tax year is the calendar year. The real property tax becomes a personal liability of the owner of real property on January 1 in the current real property tax year, 2010. The tax is payable on June 1, 2010. On April 30, 2010, Julio sells his house to Anita for $230,000. On June 1, 2010, Anita pays the entire real estate tax of $7,300 for the year ending December 31, 2010. How much of the property taxes may Julio deduct? a. $0. b. $2,380. c. $2,400. d. $4,920 e. None of the above. ____ 35. Brad, who uses the cash method of accounting, lives in a state that imposes an income tax (including withholding from wages). On April 14, 2010, he files his state return for 2009, paying an additional $600 in state income taxes. During 2010, his withholdings for state income tax purposes amount to $3,550. On April 13, 2011, he files his state return for 2010 claiming a refund of $800. Brad receives the refund on August 3, 2011. If he itemizes deductions, how much may Brad claim as a deduction for state income taxes on his Federal income tax return for calendar year 2010 (filed in April 2011)? a. $3,350. b. $3,550. c. $4,150. d. $5,150. e. None of the above. ____ 36. Joseph and Sandra, married taxpayers, took out a mortgage on their home for $350,000 in 1989. In May of this year, when the home had a fair market value of $450,000 and they owed $250,000 on the mortgage, they took out a home equity loan for $220,000. They used the funds to purchase a single engine airplane to be used for recreational travel purposes. What is the maximum amount of debt on which they can deduct home equity interest? a. $50,000. b. $100,000. c. $220,000. d. $230,000. e. None of the above. ____ 37. Terry pays $8,000 this year to become a charter member of Mammoth Universitys Athletic Council. The membership ensures that Terry will receive choice seating at all of Mammoths home basketball games. In addition, Terry pays $2,200 (the regular retail price) for season tickets for himself and his wife. For these items, how much qualifies as a charitable contribution? a. $6,200. b. $6,400. c. $8,000. d. $10,200. e. None of the above. ____ 38. Emily, who lives in Indiana, volunteered to travel to Louisiana in March to work on a home-building project for Habitat for Humanity (a qualified charitable organization). She was in Louisiana for three weeks. She normally makes $500 per week as a carpenters assistant and plans to deduct $1,500 as a charitable contribution. In addition, she incurred the following costs in connection with the trip: $600 for transportation, $1,200 for lodging, and $400 for meals. What is Emilys deduction associated with this charitable activity? a. $600. b. $1,200. c. $1,800. d. $2,200. e. $3,700. ____ 39. In 2010, Roseann makes the following donations to qualified charitable organizations: Basis Inventory held for resale in Roseanns business (a sole proprietorship) Stock in ABC, Inc. held as an investment (acquired two years ago) Comic book collection held as an investment (acquired six years ago) $ 4,000 8,000 2,000 Fair Market Value $ 3,600 20,000 10,000 The ABC stock and the inventory were given to Roseanns church, and the comic book collection was given to the United Way. Both donees promptly sold the property for the stated fair market value. Disregarding percentage limitations, Roseanns charitable contribution deduction for 2010 is: a. $14,000. b. $25,600. c. $26,000. d. $33,600. e. None of the above. ____ 40. Betty owned stock in General Corporation that she donated to a church (a qualified charitable organization) on July 28, 2010. What is the amount of Bettys charitable contribution deduction assuming that she had purchased the stock for $13,400 on October 17, 2009, and the stock had a value of $18,800 when she made the donation? a. $5,400. b. $13,400. c. $16,100. d. $18,800. e. None of the above.

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(2).Areallbiologicalmembranesidentical?Pleasegiveanexampletoexplain youranswer.IbasethisdiscussionheavilyonthecontentdiscussedinChapter10: MembraneStructureofTheMolecularBiologyofTheCell5 Edition(Albertsthetal.,2008).Thisdiscussionfocusesprimarilyonce
Johns Hopkins - AAS - 410.303.81
(1). What affects the fluidity of biological membranes? How do hibernating animals cope with cold temperature? This discussion will be guided primarily by the course textbook, Life: The Science of Biology. Similar to my earlier discussion on what makes me
Johns Hopkins - AAS - 410.303.81
(1).Mostvitaminsarecoenzymesorprecursorsto coenzymes.Pleasedoliteratureresearchandgivean exampletoexplainhowthevitaminaffectstheactivityofthe enzyme.Towards the end of chapter 6 in our course textbook, Life: The Science of Biology, we learned that in ord
Johns Hopkins - AAS - 410.303.81
(3). Amylase is a digestive enzyme that breaks down starch and is secreted in the mouth of humans. Amylase functions well in the mouth but ceases to function once it hits the acidic stomach environment. Explain why amylase does not function in the stomach
Johns Hopkins - AAS - 410.303.81
(1). What are the structures and functions of eukaryotic chromosomes? How many chromosomes do human cells have? According to our textbook, L ife: The Science of Biology, eukaryotic chromosomes are highly complex structures. Many of i ts features essential
Johns Hopkins - AAS - 410.303.81
(2).Whataretheeukaryoticcellcycleeventsthatoccurduring interphaseandmitosis?The content for this discussion will be guided primarily by our textbook, Life: The Science of Biology. According to our textbook, the cell cycle includes those events that will
Johns Hopkins - AAS - 410.303.81
(1). Please give an example to discuss the X-linked human phenotypes. Chapter 10 of our textbook, Life: The Science of Biology, covered x-linked human phenotypes extensively. I will start this discussion by more broadly describing the inheritance of sex c
Johns Hopkins - AAS - 410.303.81
(2). There are a variety of abnormalities in the numbers of sex chromosomes due to nondisjunction during gametogenesis. Please discuss the signs and problems conditions such as Klinefelter and Turner syndromes. The primary source of this discussion respon
Johns Hopkins - AAS - 410.303.81
(2). Please discuss how transcription occurs in three steps According to our textbook, Life: The Science of Biology, the central dogma states that DNA forms RNA via Transcription, which then form amino acid chains (polypeptides) via Translation. In Transc
Johns Hopkins - AAS - 410.303.81
(3). Please give an example to discuss how the post-translational modification of proteins occurs and how it affects protein structure and function. To begin this discussion, lets first talk about the processes that occur during or immediately following p
Harold Washington College - CCC - EE - 101
/ * / Item.java / / Represents an item in a shopping cart. / / * i import java.text.NumberFormat; public class Item cfw_ private String name; private double price; private int quantity; / -/ Create a new item with the given attributes. / -public Item (Str
Cleveland State - MKT - 600
I. Factual Summary Fenix del Sur, LLC, a leading artifact business company that sources and sells South American and African artifacts, started as an operating post near Tucson, is considered to be wellknown since the early 1900's in the jewelry and potte
Delta MI - MARKETING - 111
Chapter 8 NotesMarket Segmentation: A market is (1) people or organizations with (2) needs or wants and with (3) the ability and (4) willingness to buy. Market segment is a subgroup of people or organizations sharing one or more characteristic that cause
Iowa Central Community College - ECON - 101
Vernon MascarenhasStudent ID:964369406 Professor: Ahmet Dursun Course: English 101C Date: 09-16-2010The Belly Rules the MindFrom the time we are on this planet till the end,we are continuously learning what is right from wrong ,What is civilized and un
North Park - ETHICS - 101
Business Ethics in the News Article 3 Allison Ensz St. Francis school flex-plan worker charged in $120,000 theft Rachel Heinen, a human resources worker for the St. Francis School board was caught for embezzling over $120,000 over a two year period from a
North Park - ETHICS - 101
Allison Ensz Article 1 Business Ethics in the News The article I wrote about is about the CEO of North Memorial Hospital being busted in a prostitution sting. The reason this is a business ethics article is because he has recently done at least 3 commerci
North Park - ETHICS - 101
Allison Ensz September 9, 2010 Business Ethics in the News This article describes how many American energy manufacturing companies are shutting down their businesses based in the United States and are moving to China. They are doing this because the Chine
North Park - ETHICS - 101
BP stations consider other brandsBy Harry R. Weber Associated Press Writer October 14, 2010 1:01 PM NEW ORLEANS (AP) Oil has stopped spewing into the Gulf of Mexico, but BP remains unusually vulnerable to the prospect of U.S. gas stations defecting to ot
North Park - ETHICS - 101
CompanyAccusedofFiringOverFacebookPostBy STEVEN GREENHOUSE Published: November 8, 2010Inwhatlaborofficialsandlawyersviewasagroundbreakingcaseinvolvingworkers andsocialmedia,theNationalLaborRelationsBoardhasaccusedacompanyof illegallyfiringanemployeeafte
North Park - ETHICS - 101
Allison Ensz - Business Ethics in the News Article What happened in this article is Johnson and Johnson admitted to misleading regulators and consumers by using paid contractors to buy faulty Motrin painkiller products from store shelves rather than annou
North Park - ETHICS - 101
Johnson & Johnson, Under Investigation, Tops CSR IndexPosted by admin2 October 13, 2010 Printer-friendly by Michael Connor In a demonstration of how perception can sometimes trump reality, Johnson & Johnson topped a list of companies perceived by America
North Park - ETHICS - 101
Johnson & Johnson, Under Investigation, Tops CSR IndexPosted by admin2 October 13, 2010 Printer-friendly by Michael Connor In a demonstration of how perception can sometimes trump reality, Johnson & Johnson topped a list of companies perceived by America