Answered: Denise is divorced and files a single…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

Denise is divorced and files a single tax return claiming her two children, ages 7 and 9, as dependents. Her AGI for 2020 is $81,500. Denise's child tax credit for 2020 is:

a. $3,000

b. $4,000

c. $1,000

d. $2,000

e. $0

Cork Oak Corporation purchased a heavy-duty truck (not considered a passenger automobile for purposes of the listed property and luxury automobile limitations) on May 1, 2020 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 2020 calendar tax year using the conventional (for financial accounting purposes) straight-line depreciation method?

a. $3,200

b. $4,800

c. $2,400

d. $400

e. None of these choices are correct.

Choose the incorrect statement.

a. Books and records may be kept on a different year-end basis than the year-end used for tax purposes.

b. Almost all individuals file tax returns using a calendar year accounting period.

c. An individual may request IRS approval to change to a fiscal year-end basis if certain conditions are met.

d. The choice to file on a fiscal year-end basis must be made with an initial tax return.

Which of the following amounts paid by an employer to an employee is not subject to withholding?

a. Commissions

b. Bonus

c. Salary

d. Travel expense reimbursements from an accountable plan

e. All of these choices are subject to withholding.

Automobiles generally have a 3-year cost recovery period under the Modified Accelerated Cost Recovery System (MACRS).

True

False

Bob and Carol file their tax returns using the married filing jointly status. Their AGI is $132,500. They have two children, ages 11 and 7. How much child tax credit can Bob and Carol claim for their two children?

a. $2,000

b. $4,000

c. $0

d. $2,850

e. None of these choices are correct.

The use of the earned income credit could result in a taxpayer receiving a refund even though he or she has not paid any income taxes.

True

False

The hybrid method of accounting involves the use of both the accrual and cash methods of accounting.

True

False

Most partnerships, S corporations, and personal service corporations owned by individuals choose a September 30 year-end so that they may defer 3 months of income.

True

False

Curly and Rita are married, file a joint return, and have two dependent children, ages 11 and 13. Their AGI is $417,000. By how much is their child tax credit reduced in 2020?

a. $3,150

b. $1,150

c. $850

d. $4,000

e. $0

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions