Question 2.2. The Dot Corporation has changed its year-end from a calendar year-end to an August 31 fiscal year end. The income for its short period from January 1 to August 31 is $48,000. The tax for this short period is: (Points : 1)

$4,800 $7,200 $8,667 $12,000

Question 4.4. From the records of Tom, a cash basis sole proprietor, the following information was available: (i) Gross receipts $29,600, (ii) Dividend income (on personal investments) $200, (iii) Cost of sales $15,400, (iv) Other operating expenses $3,000, and (v) State business taxes paid $300. What amount should Tom report as net earnings from self-employment? (Points : 1)

$10,900 $11,200 $11,400 $14,400 None of the choices provided

Question 5.5. Vernon is a cash basis taxpayer with a calendar tax year. On October 1, 2014 he entered into a lease to rent a building for use in his business at $3,000 a month. On that day Vernon paid 18 months rent on the building, a total of $54,000 ($3,000 18 months). How much may Vernon deduct for rent expense on his 2014 tax return? (Points : 1)

$0 $12,000 $36,000 $54,000

Question 8.8. Which of the following is not an acceptable method of accounting under the tax law? (Points : 1)

The accrual method The cash method The hybrid method All of the choices provided are acceptable

Question 9.9. Which one of the following entities cannot use the cash method for tax purposes? (Points : 1)

A large almond farm with $40 million in gross receipts. A continuing education provider with $2 million in gross receipts & 20 employees. A nationwide law firm with $5.4 million in gross receipts. A small sole proprietorship with $150,000 in gross receipts. All of the choices provided may use the cash method.

Question 11.11. Becky is a cash basis taxpayer with the following transactions during her calendar tax year: (i) Cash basis revenue $54,000, (ii) Cash basis expenses-excluding rent $25,000, (iii) Rent expense paid on December 1 for use of a building for 24 months $36,000. What is the amount of her taxable income from the business for this tax year? (Points : 1)

$7,000 loss $11,000 $27,500 $29,000 None of the other choices provided

Question 12.12. Cork Oak Corporation purchased a heavy-duty truck (not considered a passenger automobile for purposes of the listed property & luxury automobile limitations) on May 1, 2014 for use in its business. The truck, with a cost basis of $24,000, has a 5-year estimated life. It also is 5-year recovery property. How much depreciation should be taken on the truck for the 2014 calendar tax year using the conventional (for financial accounting purposes) straight-line depreciation method? (Points : 1)

$400 $2,400 $3,200 $4,800 None of the other choices

13. Jenny constructed a building for use as a residential rental property. The cost of the building was $164,975, & it was placed in service on August 1, 1990. The building has a 27.5-year MACRS life. What is the amount of depreciation on the building for 2014 for tax purposes? (Points : 1)

$2,250 $3,000 $6,000 $6,547 None of the other choices

Question 14.14. ABC Corp bought a production machine on January 1, 2012 for $31,250. The company elected out of Section 179 expensing & elected out of claiming bonus depreciation in 2012 & is depreciating the machine using the MACRS accelerated depreciation tables for 5-year property. What is the 2014 depreciation year 3 deduction for the machine? (Points : 1)

$6,000 $6,250 $10,000 $12,500 None of the other choices are correct

Question 15.15. Which one of the following is true about Modified Accelerated Cost Recovery System ("MACRS")? (Points : 1)

A building is depreciated using 200% declining balance depreciation. Buildings & autos both have the same depreciation life. A light duty business truck is depreciated using accelerated depreciation. All of the other choices are false.

Question 22.22. An asset other than a passenger automobile is placed in service on May 15, 2014 & has a depreciable basis of $36,000. The asset is in the 7-year recovery class. What is the maximum depreciation deduction that may be claimed for 2014, excluding the election to expense & bonus depreciation? (Points : 1)

$2,572 $5,144 $25,000 $36,000 None of the other choices

29. What is the maximum depreciation expense deduction for Year 2 (2015) for a passenger automobile, used 100% for qualified business use, placed in service on June 15, 2014 & costing $14,000 (the election to expense is not made & no bonus depreciation was taken)? (Points : 1)

$2,800 $3,160 $4,480 $5,100 None of the other provided choices

Question 31.31. On June 1, 2014, Sandalwood Corporation purchases a passenger automobile for 100% use in its business. The automobile is in the 5 year cost recovery class & has a basis for depreciation of $30,000. Assuming that the corporation elects the accelerated method of cost recovery for the asset & does not elect to expense any of its cost or take bonus depreciation, what is the total tax depreciation deduction for the 2014 calendar tax year (Year 1)? (Points : 1)

$3,060 $3,160 $4,287 $6,000 None of the other selections

Question 33.33. On June 1, 2014, Cork Oak Corporation purchased a passenger automobile for 100% use in its business. The auto, with a cost basis of $22,000, has a 5-year estimated life. It also is 5-year recovery property. How much depreciation should be taken for 2014, assuming Cork Oak Corporation uses the accelerated depreciation method under MACRS but does not choose to make the election to expense or take bonus depreciation? (Points : 1)

$2,100 $3,160 $4,400 $4,900 None of the other choices