ACCT 324 Week 4 Midterm Exam Answers

percentage is maintained for the life of the car.). She does NOT elect to take additional
first-year depreciation. Determine the cost recovery deduction for 2011.
12. Question : (TCO 10) Which of the following is correct?
13. Question : (TCO 10) On May 2, 2011, Karen places in service a new sports utility vehicle
that costs $70,000 and has a gross vehicle weight of 6,300 lbs. The vehicle is used 40%
for business and 60% for personal use. Determine the cost recovery deduction for 2011.
14. Question : (TCO 10) Danielle owns a vacation cottage. During the current year, she
rented it for $1,500 for 48 days, and lived in it for 12 days. How would any expenses be
accounted for?
15. Question : (TCO 3) During the year, Rick had the following insured personal casualty
losses (arising from one casualty). Rick also had $18,000 AGI for the year.
16. Question : (TCO 3) John had adjusted gross income of $60,000. During the year, his
personal use summer home was damaged by a fire. Pertinent data with respect to the
home follows:
17. Question : (TCO 3) Jim purchases a ticket for $80 for a special concert by the symphony
(a qualified charity). If the price of a ticket is normally $25, what is the amount allowed
as a charitable deduction?
18. Question : (TCO 3) Karen, a calendar year taxpayer, made the following donations to
qualified charitable organizations in the current year:
19. Question : (TCO 3) This year, Ralph made the following contributions to the University
of the Northwest (a qualified charitable organization):
20. Question : (TCO 3) Several years ago, Joy acquired a passive activity. Until 2008, the
activity was profitable. Joy’s at-risk amount at the beginning of 2008 was $250,000. The
activity produced losses of $100,000 in 2008, $80,000 in 2009, and $90,000 in 2010.
During the same period, no passive income was recognized. How much is suspended
under the at-risk rules and the passive loss rules at the beginning of 2011?
21. Question : (TCO 3) Wes’ at-risk amount in a passive activity is $25,000 at the beginning
of the current year. His current loss from the activity is $35,000, and he has no passive
activity income. At the end of the current year, which of the following statements is
incorrect?
22. Question : (TCO 2) The installment method applies to which of the following sales with
payments being made in the year following the year of sale?
23. Question : (TCO 2) In 2010, Helen sold property and reported her gain by the installment
method. Her basis in the property was $150,000 ($250,000 cost less $100,000 of