Essay on Acct 324 Final Exam Solution

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ACCT 324 Final Exam Solution

Question 1. (TCOs 2 & 3) Evelyn sold her personal residence to Drew on March 1 for $300,000. Before the sale, Evelyn paid the real estate taxes of $3,000 for the calendar year. For income tax purposes, the real estate tax deduction is apportioned as follows: $750 to Evelyn and $2,250 to Drew. Drew’s basis in the residence is:

Question 2. (TCOs 3, 4, 5, & 7) In the current year, Galaxy Corporation, a closely held C corporation that is not a personal service corporation, has $80,000 of passive losses, $60,000 of active business income, and $10,000 of portfolio income. How much of the passive loss may Galaxy
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During the year, the purchaser paid Damien $30,000 principal and $72,000 interest on the note and paid $6,000 principal and $18,000 interest on the mortgage he assumed. The contract price for the above transaction is what amount?

Question 7. (TCOs 3, 4, 5, & 7) Which of the following is not an itemized deduction allowed for AMT purposes?

Question 8. (TCOs 3, 4, 5, & 7) Alex works as an auditor for a major CPA firm. During the months of August and September of each year, he is permanently assigned to the team auditing of Hummingbird Corporation. As a result, every day he drives from his home to Hummingbird and returns home after work. Mileage is as follows:
Miles
Home to office 15
Home to Hummingbird 22
Office to Hummingbird 6
For the period of August and September, Alex’s deductible mileage for each workday is:

Question 9. (TCOs 7, 8, & 9) Matt and Shanekwa, ages 45 and 44, respectively, file a joint tax return for 2012. They provided all of the support for their 24-year-old son, who had $2,500 of gross income. Their 23-year-old daughter, a full-time student until her graduation on June 14, 2012, earned $6,000, which was 45% of her total support during 2012. Her parents provided the remaining support. Matt and Shanekwa also provided total support for Shanekwa’s father who is a citizen and life-long resident of Portugal. How many personal and dependency exemptions can Matt and Shanekwa claim on their 2012

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