ACCOUNTING TAX

1. Susco had the following items this year:

Gross receipts	$700,000
Operating expenses	500,000
Long-term capital gain	40,000
Long-term capital loss	(20,000)
Short-term capital gain	16,000
Short-term capital loss	(44,000)

a. What is Susco's taxable income and does it have any carrybacks/carryovers? b. What would be Suco's taxable income if the long-term capital gain were $70,000 (instead of $40,000)?

2. Caskets Inc. was incorporated on June 1, but did not start business until September 1. It adopted a fiscal year ending March 31, coinciding with the end of its natural business cycle. In connection with organizing the business, Caskets Inc. incureed the following expenses:

Legal fees for incorporating	$8,000
Accounting fees for opening coporate books	400
Tax planning advice	300
Printing and issuing stock certificates	50
Incorporation fee to state	100
Temporary directors' fees	2,000
Legal fees for the transfer of assets to the corporation	500
	$11,350

a. What is the amount of the organizational expenditures?

b. How much of the amount is deductible in the coporation's first taxable year?