ACCT 324 help A Guide to career/Snaptutorial ACCT 324 help A Guide to career/Snaptutorial | Page 14

7. TCO 7) Orange Cable TV Company, an accrual basis taxpayer,
allows its customers to pay by the year in advance ($350 per year), or
two years in advance ($680). In September 2008, the company
collected the following amounts applicable to future services:
October 2008-September 2010 services
(two-year contracts)
$72,000
October 2008-September 2009 services
(one-year contracts)
$64,000
Total
$136,000
As a result of the above, Orange Cable should report as gross income
8. (TCO 7) With respect to the prepaid income from services, which
of the following is true?
9. (TCO 3) Section 119 excludes the value of meals from the
employees' gross income:
10. (TCO 3) Under the Swan Company's cafeteria plan, all full-time
employees are allowed to select any combination of the benefits
below, but the total received by the employee CANNOT exceed
$8,000 a year.
I. Group medical and hospitalization insurance for the employee,
$3,600 a year.
II. Group medical and hospitalization insurance for the employee's
spouse and children, $1,200 a year.
III. Childcare payments, actual cost, but not more than $4,800 a year.
IV. Cash required to bring the total of benefits and cash to $8,000.
Which of the following statements is true?
11. (TCO 10) Hans purchased a new passenger automobile on August
17, 2010 for $40,000. During the year, the car was used 40% for
business and 60% for personal use. Determine his cost recovery
deduction for the car for 2010