Question
Question e Sarah operates a proprietorship that generated $100,000 in accounting net income under GAAP. Included in this amount are: $4,000 for office rent expense;
Question e
Sarah operates a proprietorship that generated $100,000 in accounting net income under GAAP. Included in this amount are:
- $4,000 for office rent expense;
- $7,000 of amortization expense;
- $112,000 cost of goods sold; and
- $12,000 meals and entertainment with clients.
Sarahs maximum CCA has been calculated at $10,000 for the year. How much is Sarahs business income for tax purposes?
| $113,000 |
| $109,000 |
| $103,000 |
| $107,000 |
Question f
In 2016, Kates Antiques deducted a reserve for doubtful debts of $14,000. During 2017, she had actual write-offs of $12,000 and recoveries of previously written off debts of $2,000. At the end of 2017, she deducted a reserve for doubtful debts of $15,000. Kates 2017 net deduction for bad debts would be:
| $13,000 |
| $10,000 |
| $11,000 |
| $15,000 |
Question g
Which of the following expenses would be denied as a deduction under the Income Tax Act?
| A speeding ticket received by a truck delivering goods for resale. |
| Work space in a home costs for a self-employed contractor. |
| The costs of disability related building modifications. |
| A reserve for doubtful accounts. |
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