NJCU ACCT604 Ch 4 quiz

·
Question
1
2
out of 2 points

The
alimony recapture rules are intended to:

· Question 2
2
out of 2 points

A
sole proprietorship purchased an asset for $1,000 in 2013 and its value was
$1,500 at the end of 2013. In 2014, the sole proprietorship sold the
asset for $1,400. The sole proprietorship realized a taxable gain of $400 in
2014 but an economic loss of $100 in 2014.

· Question 3
2
out of 2 points

ABC
Corporation declared a dividend for taxpayers of record as of December 24,
2013. The dividend checks were mailed on December 31, 2013. Ed, a
cash basis shareholder, received the dividend check on January 2, 2014. Ed
cannot delay reporting the income from the dividend until 2014.

· Question 4
2
out of 2 points

Barney
painted his house which saved him $3,000. According to the realization
requirement, Barney must recognize $3,000 of income.

· Question 5
2
out of 2 points

Norma’s
income for 2013 is $27,000 from part-time work and $9,000 of Social Security
benefits. Norma is not married. A portion of her Social Security benefits
must be included in her gross income.

· Question 6
2
out of 2 points

Under
the terms of a divorce agreement, Kim was to pay her husband Tom $7,000 per
month in alimony. Kim’s payments will be reduced to $3,000 per month when
their 9 year-old son becomes 21. The husband has custody of their
son. For a twelve-month period, Kim can deduct from gross income (and
Tom must include in gross income):

· Question 7
2
out of 2 points

Turner,
Inc., provides group term life insurance to the officers of the corporation
only. Janet, a vice-president, received $400,000 of coverage for the year at
a cost to Turner, Inc. of $5,600. The Uniform Premiums (based on Janet’s age)
are $15 a year for $1,000 protection. How much of this must Janet include in
gross income this year?

· Question 8
2
out of 2 points

Debbie
is age 67 and unmarried and her only sources of income are $200,000 in
taxable interest and $20,000 of Social Security benefits. Debbie’s adjusted
gross income for the year is:

· Question 9
2
out of 2 points

The
realization requirement gives an incentive to own assets that have increased
in value and to sell assets whose value has decreased.

· Question 10
2
out of 2 points

Tom,
a cash basis taxpayer, purchased a bond on March 31 for $10,000, plus
$100 accrued interest. In December, Tom collected $500 interest from the
bond. Tom’s interest income from the bond for the year is $500.