Ajax Computer Company Is an Accrual Method Calendar Year Taxpayer

question 78

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 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:

Cystitis

An inflammation of the bladder, often caused by a urinary tract infection, leading to symptoms such as urgency, frequency of urination, and sometimes pelvic pain.

Perineal Area

The region of the body between the pubic symphysis and the coccyx, including the perineum, and surrounding structures.

Renal Sinus

The medial depression of a kidney.

Hilum

The indented side of a lymph node. Also, the entrance of the renal sinus that contains the renal artery, renal vein, and ureter.