Question Completion:
Each year, Tom and Cindy Bates (married filing jointly) report itemized deductions of $20,000 (which includes an annual $4,000 pledge payment to their church). Upon the advice of a friend, they do the following: In early January 2019, they pay their 2018 pledge; during 2019, they pay the 2019 pledge; and in late December 2019, they prepay their 2020 pledge. a. What are the Bateses trying to accomplish? To have their itemized deductions exceed the standard deduction . b. What would the Bates' total itemized deductions be if all three church pledge payments were made in 2019?
Answer:
The Bates' total itemized deductions would be $20,000 if all three church pledge payments were made in 2019 (including $12,000 for the three years in church pledges and another $8,000 for other deductions).
Explanation:
It is assumed that the Bates' Adjusted Gross Income for 2019 is within the range of $100,000 to $200,000, which enables them to make charitable contributions up to $4,155 per annum. Since taxation uses the cash basis, it is possible for the Bates to claim the $12,000 cash in pledges for the current year when payment is made in the year.
Answer:
Option (d) is correct.
Explanation:
In a perfectly competitive market, there are large number of buyers and sellers, so price and quantity is determined by the market forces. Firms in a perfectly competitive market can earn abnormal profits, normal profits or losses in the short run and can earn normal profits and losses in the long run.
The profit for these firms is calculated by subtracting the product of average total cost and quantity from the product of price and quantity.
Profit( = (P × Q) - (ATC × Q)