Ajax Computer Company Is an Accrual-Method Calendar-Year Taxpayer

question 36

Multiple Choice

Ajax Computer Company is an accrual-method calendar-year taxpayer. Ajax has never advertised in the national media prior to this year. In November of this year, however, Ajax paid $1 million for television advertising time during a "super" sporting event scheduled to take place in early February of next year. In addition, in November of this year the company paid $500,000 fora one-time advertising blitz during a professional golf tournament in April of next year. What amount of these payments, if any, can Ajax deduct this year?

• A)$1 million
• B)$500,000
• C)$1.5 million
• D)$1.5 million only if the professional golf tournament is played before April 15
• E)No deduction can be claimed this year

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Definitions:

Oedipus Complex

A concept in psychoanalytic theory describing a child's feelings of desire for the opposite-sex parent and jealousy and rivalry toward the same-sex parent.

Same-sex Parent

A parent who identifies as having a sexual orientation that is attracted to individuals of the same sex.

Phallic Stage

In Freudian psychoanalysis, a stage of psychosexual development where a child's focus of libido is concentrated in the genital area.

Opposite Sex

A term used to refer to a sex or gender that is different from one's own.