ACC 124 Final Exam Review With Complete Solution

ACC 124 Final Exam Review With Complete Solution For 2019, the maximum base for the Social Security portion of the FICA tax is: a. $128,700 b. $132,900 c. $127,200 d. $128,400 e. None of these choices are correct. correct answer- b. $132,900 Which one of the following provisions was passed by Congress to meet a social goal of the tax law? a. The moving expense deduction for adjusted gross income. b. The deduction for soil and water conservation costs available to farmers. c. The charitable deduction. d. The deduction for job hunting expenses. e. None of these choices are correct. correct answer- c. The charitable deduction. Which of the following is not considered one of the five basic taxable or reporting entities? a. Corporation b. Partnership c. Individual d. Portfolio e. Trust correct answer- d. Portfolio Oscar and Mary have no dependents and file a joint income tax return for 2019. They have adjusted gross income (all wages) of $140,000 and itemized deductions of $30,000. What is the amount of taxable income that Oscar and Mary must report on their 2019 income tax return? a. $110,000 b. $116,000 c. $140,000 d. $93,600 e. $102,000 correct answer- a. $110,000 Which one of the following forms must an employer provide to his employee by January 31 of the following year? a. W-2 b. 1040 c. W-3 d. 941 e. W-4 correct answer- a. W-2 John, age 25, is a full-time student at a state university. John lives with his unmarried sister, Ann, who provides over half of his support. His only income is $4,300 of wages from a part-time job at the college book store. What is Ann's filing status for 2019? a. Qualifying widow(er) b. Single c. Head of household d. Married, filing separately e. None of these choices are correct. correct answer- b. Single William is a divorced taxpayer who provides a home for his dependent child, Edward. What filing status should William indicate on his tax return? a. Married, filing separately b. Qualifying widow(er) c. Head of household d. Single e. None of these choices are correct. correct answer- c. Head-of-household All of the following must be included in gross income, except: a. Gambling winnings b. Dividends c. Jury duty fees d. Partnership income e. Accident insurance proceeds correct answer- e. Accident insurance proceeds Mary received the following items during the current year: Christmas bonus from her employer $600 Christmas gift from her father $100 Unemployment compensation $35 What is the total amount of the above items that must be included in Mary's current year gross income? a. $100 b. $135 c. $0 d. $600 e. $635 correct answer- e. $635 Tim, a single taxpayer, receives $500 of qualified dividends from Exxon in the current year. His taxable income before the dividends is $26,000. Tim's tax on the dividends will be: a. $100 b. $50 c. $0 d. $75 e. $25 correct answer- c. $0 Roger is required under a 2012 divorce decree to pay $500 of alimony and $200 of child support per month for 12 years. In addition, Roger makes a voluntary payment of $100 per month. How much of the total monthly payment is deductible by Roger? a. $500 b. $600 c. $0 d. $200 e. None of these choices are correct. correct answer- a. $500 Nicole is a student at USB Law School; she receives a $52,000 scholarship for 2019. Of the $52,000, $40,000 is used for tuition, $5,000 is used for books, and $7,000 is used for room and board. How much of the scholarship is excluded from taxable income for Nicole in 2019?