5.6.7.8.9.The salary of a housekeeper employed by a taxpayer whoconducts a business which demands attendance in the city duringthe day.The cost incurred by a company operating a drive-in theatre toreconstruct a public access road, converting it from a gravel roadinto a more wear-resistant bitumen road.Newspapers purchased by an accountant who advises clients onfinancial and investment matters.The cost of dog food and veterinary expenses in respect of twodogs used by a scrap metal dealer as watchdogs.The cost incurred by an insurance consultant for a home phoneanswering service used to record calls while out. (It is estimatedthat half of the calls recorded are private. However, prior toaccepting his position as an insurance consultant the taxpayer didnot have an answering service.)10. Travelling expenses incurred by a school teacher in using her owncar to attend sports afternoons. The sporting activities were at anearby field and the only alternative means of transport was towalk. Question 5.3Discuss whether a deduction would be allowable for the following:1.2.3.4.Provision for the estimated amount of trade debtors' accountswhich might not be collected.Fines paid by a bookmaker for conducting illegal off-coursebetting activities.An amount of $450 paid to a solicitor for preparing a partnershipdeed.The expense incurred by the production manager of a large firm oftravelling overseas to purchase a new computer.

Deduction available in Australian taxation An item that can be deducted from a taxpayer's assessable…

5. 6. The cost incurred by a company operating a drive-in theatre to reconstruct a public access road, converting it from a gravel road into a more wear-resistant bitumen road. 7. 8. The salary of a housekeeper employed by a taxpayer whe conducts a business which demands attendance in the city during the day. 9. Newspapers purchased by an accountant who advises clients on financial and investment matters. The cost of dog food and veterinary expenses in respect of two dogs used by a scrap metal dealer as watchdogs. The cost incurred by an insurance consultant for a home phone answering service used to record calls while out (It is estimated

5. 6. The cost incurred by a company operating a drive-in theatre to reconstruct a public access road, converting it from a gravel road into a more wear-resistant bitumen road. 7. 8. The salary of a housekeeper employed by a taxpayer whe conducts a business which demands attendance in the city during the day. 9. Newspapers purchased by an accountant who advises clients on financial and investment matters. The cost of dog food and veterinary expenses in respect of two dogs used by a scrap metal dealer as watchdogs. The cost incurred by an insurance consultant for a home phone answering service used to record calls while out (It is estimated

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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please choose between decutible and nondeductible expense for each question
Give typing answer with explanation and conclusion
Scenario: Joe Babbitt, a former executive of T-Mart, just started a term as mayor of Saulk Center. For the past several days, he has been looking for a way to keep his campaign promise to increase services without raising taxes or service charges. While lunching at the country club with the treasurer of T-Mart, the subject of a recent sale and leaseback of one of T-Mart’s stores came up. Following a common practice in retailing, T-Mart had erected a building and sold it to an investor. It then signed a long-term lease on the building. “Bingo! That’s it,” thought Mayor Babbitt. “We can sell several of the city’s buildings—as well as police cars, fire engines, and other vehicles—to investors and lease them back. That will give us the revenues we desperately need. Now I can concentrate on fighting crime.” Question: Do you agree with Mayor Babbitt?
R, a new client of yours, is a self employed catere. R drives his personal van when delivering catered meals to customers. You asked him to provide the amount of business miles driven using his vehicle. You are planning on using the standard mileage method to calculate R deduction for transportation costs. R responded by saying " well, I don't keep track of my miles. I guess I drove around 3000 miles last year for the business " What would you say to him?
Which one of the following costs is most likely to be deductible? Group of answer choices Fines paid for dumping toxic waste into a City of Denver park. Bribes to a city health inspector to ensure an “A” rating to a restaurant. The telephone bill for the headquarters of an illegal stolen car parts organization. Advertising costs for a Colorado marijuana dispensary.
Prepare the following journal entries. (a) The $3,700 cost of repairing a vehicle. The repair is not expected to increase the operating efficiency of the vehicle. (b) The $6,500 cost of a major engine overhaul on an emergency generator. The overhaul is expected to increase the operating efficiency of the generator. (c) The $4,000 closing costs associated with the acquisition of land. (d) A $150 charge for transportation expenses on new equipment purchased.
Needing continuing education hours to renew your CPA license, you, a sensible person, decide to combine business and pleasure. So you find a tax conference in Miami and buy a round-trip ticket for $400. The conference is Tuesday-Friday. Bright and early on Saturday morning you hop into your rental car and drive down the “Overseas Highway” to Key West, where you party and stay over. On Sunday afternoon you reluctantly return to Miami and fly home. How much, if any, of your airfare is deductible, and why?
Allocated on the basis of program revenues. The head administrator of Jackson County Senior Services, Judith Miyama, considers last year's net operating income of $33,800 to be unsatisfactory; therefore, she is considering the possibility of discontinuing the housekeeping program. The depreciation in housekeeping is for a small van that is used to carry the housekeepers and their equipment from job to job. If the program were discontinued, the van would be donated to a charitable organization. None of the general administrative overhead would be avoided if the housekeeping program were dropped, but the liability insurance and the salary of the program administrator would be avoided. Required: 1-a. What is the financial advantage (disadvantage) of discontinuing the Housekeeping program? 1-b. Based on the financial advantage (disadvantage) of discontinuing the Housekeeping program calculated in requirement Req 1A, should the Housekeeping program be discontinued? 2-a. Prepare a properly…