Ajax Computer Company Is an Accrual Method Calendar Year Taxpayer

question 6

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 for advertising time during a professional golf tournament which will occur once 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:

Baby Fat

The extra body fat that infants typically have, which plays a role in their development and gradually decreases as they grow.

Physical Development

The biological changes and growth processes that occur in the human body over a lifetime, including changes in size, shape, and physical abilities.

Preschool Years

The period in a child's life between birth and when they begin formal school, typically around ages 3 to 5, focusing on basic skills and social development.

Sex Differences

The biological and physiological distinctions between male and female individuals, including anatomical, genetic, and hormonal variations.