FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Timmy and Tammy have long attended the True Believer Church (TBC). They send their kids, ages 8 and 10, to the affiliated True Believer Academy, which broadcasts its mission statement loudly and proudly on its website: “Molding tomorrow’s True Believers, one child at a time.”
Yearly tuition at the Academy is $18,000 but it also offers a “two-fer” discount, so Timmy and Tammy pay $30,000 (instead of $36,000) annually for their two kids. And they use TBC’s very convenient “Annual Combined Giving Installment Plan” by simply adding (once a month) $2,500 to one of their routine weekly “Offerings” checks to TBC.
In January 2021 they received their “2020 Annual Giving Statement” from TBC showing that TBC had received a grand total of $40,000 from Timmy and Tammy during 2020.
In preparing Timmy and Tammy’s 2020 Form 1040, you will input into the soft-ware a Schedule A charitable contribution deduction of ___ for their 2020 pay-ments to TBC.
(a) $40,000
(b) $36,000
(c) $30,000
(d) $10,000
(e) $4,000
(f) $0
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