SWFT Comprehensive Vol 2020
43rd Edition
ISBN: 9780357391723
Author: Maloney
Publisher: Cengage
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Transcribed Image Text:Slumar, an accrual basis, calendar year corporation, reported $7,289,200 net income before tax on its financial statement
prepared in accordance with GAAP. The corporate records reveal the following information.
The allowance for bad debts on January 1 was $104,700. Write-offs for the year totaled $113,228, and the addition to the
allowance for the year was $105,000.
Slumar incurred $22,000 of entertainment costs and $32,000 of business meals.
At its December 16 meeting, Slumar's board of directors authorized a $100,000 salary bonus for the corporation's CEO.
Slumar paid the bonus to the CEO on January 4. The CEO owns 62% of Slumar's outstanding stock.
Slumar was incorporated last year. On its first tax return, it reported a $334,712 net operating loss.
Compute Slumar's taxable income.
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