The Income Statement of the ABC Corporation in Puerto Rico, prepared on a tax basis, presents the following results: ABC Corporation Income Statement (Tax Base) For the year ended December 31, 20X1 Income $ 1,500,000 Cost of sale (600,000) Gross margin 900,000 Salaries (100,000) Donations to non-profit entities (40,000) Other operational expenses (200,000) Net income $ 560,000 Determine the deduction for donations that the ABC Corporation may claim in tax year 20X1. a. $ 56,000 b. $ 10,000 c. $ 40,000 d. $ 4,000
The Income Statement of the ABC Corporation in Puerto Rico, prepared on a tax basis, presents the following results: ABC Corporation Income Statement (Tax Base) For the year ended December 31, 20X1 Income $ 1,500,000 Cost of sale (600,000) Gross margin 900,000 Salaries (100,000) Donations to non-profit entities (40,000) Other operational expenses (200,000) Net income $ 560,000 Determine the deduction for donations that the ABC Corporation may claim in tax year 20X1. a. $ 56,000 b. $ 10,000 c. $ 40,000 d. $ 4,000
Chapter17: Corporations: Introduction And Operating Rules
Section: Chapter Questions
Problem 26CE
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The Income Statement of the ABC Corporation in Puerto Rico, prepared on a tax basis, presents the following results:
ABC Corporation Income Statement (Tax Base)
For the year ended December 31, 20X1
Income $ 1,500,000
Cost of sale (600,000)
Gross margin 900,000
Salaries (100,000)
Donations to non-profit entities (40,000)
Other operational expenses (200,000)
Net income $ 560,000
Determine the deduction for donations that the ABC Corporation may claim in tax year 20X1.
a. $ 56,000
b. $ 10,000
c. $ 40,000
d. $ 4,000
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