Question 8 (2 points) Matthew paints landscape portraits, and he treats the activity as a hobby. During the current year, Matthew incurred the following expenses while earning 53.200 from sales of painting Paints and supplies $2,200 Utilities expenses for his 1,000 studio Advertising 300 Insurance on his studio and 700 equipment Matthew uses the standard deduction and never itemizes his deductions. How will the activity from this hobby affect Matthew's taxable income? a) Increase taxable income by $2,500 b) Increase taxable income by $3,200 c) No effect on taxable income d) Decrease taxable income by $1,000 e) Increase taxable income by $300 Question 9 (2 points) XYZ Corporation spent $7000 on the annual company-wide picnic hosting 120 employees with foods and beverages, because the owner of XYZ believes this benefits its employees. During the same week, XYZ also reimburses Sarah $2500 for taking the client out for dinner. How much may XYZ deduct? O a) $0 Ob) $1,250 c) $3,500 Od) $4,750