Ronald runs his own public relations business. During the year he incurred the following expenses:(a) salary costs of $350,000;(b) travel expenses of $7,000 for travel between home and work;(c) travel expenses of $3,000 for travel from a client's premises to his home;(d) $1,500 on a new suit to impress his clients;(e) $700 on membership of the local sports club where he entertains clients;(f) $8,000 in meal expenses on entertaining clients. Required:State whether the above would be allowed as allowable deduction against assessable income. Provide a justification for your argument based on statute and case law

Taxable income is the income which states to the base on which the system of income tax impose the…

Answered: Ronald runs his own public relations…

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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Ronald runs his own public relations business. During the year he incurred the following expenses:

(a) salary costs of $350,000;
(b) travel expenses of $7,000 for travel between home and work;
(c) travel expenses of $3,000 for travel from a client's premises to his home;
(d) $1,500 on a new suit to impress his clients;
(e) $700 on membership of the local sports club where he entertains clients;
(f) $8,000 in meal expenses on entertaining clients.

Required:

State whether the above would be allowed as allowable deduction against assessable income. Provide a justification for your argument based on statute and case law

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