Chico Corporation, a Calendar-Year Accrual-Basis Corporation, Paid $3,000 on April

question 32

Multiple Choice

Chico Corporation, a calendar-year accrual-basis corporation, paid $3,000 on April 1 for a property insurance policy for the next three years, prepaid six months interest of $450 on November 1, and paid $2,000 rent for December and January on December 1.What is his deduction in the current year for these expenses?

• A)$1,900
• B)$2,450
• C)$2,600
• D)$5,450

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Definitions:

Expected Value

The predicted average outcome of a probabilistic event, accounting for all possible outcomes and their probabilities.

Stock Price

The value of a single share of a company's stock, determined by the balance of buying and selling activity in the stock market.

Probability

The measure of the likelihood that an event will occur, quantified between 0 and 1, where 0 indicates impossibility and 1 indicates certainty.

Expected Value

The expected value is a statistical concept that calculates the mean of all possible values of a random variable, weighted by their respective probabilities.