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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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Question

Harold Dunn and his wife Evadne operate a successful snack packaging business, Healthy Snacks, in St. Mary. The bulk buying of the raw materials (nuts, dried fruits, etc), the packaging and delivery to corporate area shops are done by the members of the family. The accounts for Mr. Dunn's business at 31 December 207 showed a profit of $4,500,000 after charging: $180,000 depreciation of equipment and office furniture; $750,000 for salary to his wife Evadne who supervises the office, $496,000 to his 18 year old son Shane, and $1,720,000 to himself. $78,000 interest on a loan he had obtained tgexpand his busines 3 (a) Prepare a statement, with notes where applicable, of the Healthy for the year of assessment 2014 for Harold Dunn Snacks bustness showing the taxable prof b and income tax liability (b) Shane is a part time student at the University of the West Indies. What is his tax liability, if any?

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