Ask Question
24 April, 16:22

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 $1.8 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 $1,300,000 for a 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. $1.80 million. b. $3.10 million only if the professional golf tournament is played before April 15. c. $1,300,000. d. No deduction can be claimed this year. e. $3.10 million.

+5
Answers (1)
  1. 24 April, 20:20
    0
    a. $1.80 million

    Explanation:

    This is due to the fact that under the 3½ month rule payment qualifies as economic performance provided the services are to be rendered within 3.5 months.

    Therefore, Ajax can deduct $1.80 million
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Ajax Computer Company is an accrual-method calendar-year taxpayer. Ajax has never advertised in the national media prior to this year. In ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers