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Unformatted text preview: 1. Quiz 2 Total Points 2 8 2. Less Points Missed ____ 3. Score ACCT 403 QUIZ 2 SPRING 2011 NAME___________KEY______________________ Directions – There are three questions worth a total of 28 points. The value of each question is indicated at the end of each question. For questions 2 and 3, you must show your work to receive credit . 1. Indicate True or False for the following statements based on a 2010 taxable year: (2 points each). ____F____a. Douglas purchased 300 shares of Carey, Inc. stock for $25 per share. At year end, the value has decreased to $20 per share. Douglas may elect to recognize a taxable loss of $1,500 this year as he has had a decrease in wealth . ____F____b. John is a sole tax practitioner. During 2010, he recognized a $5,000 loss from the sale of some of his office furniture. The only other time he has sold another business asset was in 2008 when he sold his office desk in which he realized a $1,000 business gain (he also recognized some recapture income not relevant to this problem). For 2010, he may treat $4,000 of the $5,000 loss as an ordinary loss. ____F____c. Harry owns a trucking company. He allows his drivers to carry loads that exceed the legal limit as the extra profits are much greater the fines his drivers receive. Harry can pay the fines and deduct them as a ordinary and necessary business expense.can pay the fines and deduct them as a ordinary and necessary business expense....
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This note was uploaded on 02/22/2012 for the course ACCT 403 taught by Professor White during the Fall '11 term at South Carolina.
- Fall '11