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What is the resort's net income for tax purposes?

What is the resort's net income for tax purposes?

SWFT Comprehensive Volume 2019
SWFT Comprehensive Volume 2019
42nd Edition
ISBN:9780357233306
Author:Maloney
Publisher:Maloney
Chapter19: Corporations: Distributions Not In Complete Liquidation
Section: Chapter Questions
Problem 35P
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Question 21: Safe Haven Wildlife Resort operates a proprietorship that generated $200,000 in income under GAAP. The year end is December 31. Included in this amount are: • $65,000 rent expense paid for the resort • $24,000 for employee bonuses accrued at December 31, 2021| to be paid March 15, 2022 • $10,000 Accounting Loss on the Disposal of Capital Assets; and • $35,000 salary expense paid to the owner's son for cleaning the animal cages (40 hours a week for 6 weeks in summer) • Parking Tickets paid for salesperson staff while travelling on business $2,000 What is the resort's net income for tax purposes? A. $271,000 B. $280,000 C. Some other number D. $212,000 E. $247,000 Question 22: Jonah owns a local restaurant that generated $250,000 in income under GAAP. Included in this amount are: • $10,000 of depreciation expense • $33,000 repair and maintenance expenses for Jonah's principal residence • $166,000 salaries and wages for kitchen and restaurant staff $24,000 rent expense for the restaurant • $8,000 promotional expense sponsoring the local sports teams • The accountant calculated the maximum CCA as $15,000 for the year How much is Jonah's income for tax purposes? A. $286,000 B. $278,000 C. $316,000 D. $283,000
Transcribed Image Text:Question 21: Safe Haven Wildlife Resort operates a proprietorship that generated $200,000 in income under GAAP. The year end is December 31. Included in this amount are: • $65,000 rent expense paid for the resort • $24,000 for employee bonuses accrued at December 31, 2021| to be paid March 15, 2022 • $10,000 Accounting Loss on the Disposal of Capital Assets; and • $35,000 salary expense paid to the owner's son for cleaning the animal cages (40 hours a week for 6 weeks in summer) • Parking Tickets paid for salesperson staff while travelling on business $2,000 What is the resort's net income for tax purposes? A. $271,000 B. $280,000 C. Some other number D. $212,000 E. $247,000 Question 22: Jonah owns a local restaurant that generated $250,000 in income under GAAP. Included in this amount are: • $10,000 of depreciation expense • $33,000 repair and maintenance expenses for Jonah's principal residence • $166,000 salaries and wages for kitchen and restaurant staff $24,000 rent expense for the restaurant • $8,000 promotional expense sponsoring the local sports teams • The accountant calculated the maximum CCA as $15,000 for the year How much is Jonah's income for tax purposes? A. $286,000 B. $278,000 C. $316,000 D. $283,000
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