Ajax Computer Company Is an Accrual Method Calendar Year Taxpayer

question 52

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:

Intellectual Processing

The mental activities involved in the understanding, processing, and communicating of information.

Intellectual Functioning

A measure of a person's ability to think, reason, solve problems, and understand complex ideas.

Intellectual Disability

A state defined by notable restrictions in intellectual abilities as well as in adaptive conduct, encompassing various common social and practical abilities.

IQ Score

A numerical measure of an individual's intelligence relative to a statistically standard population, usually based on the results of various cognitive tests.