Question

Question 24 (1 point)

Which of the following is an adjustment on the Schedule 1 for corporate income taxes?

Question 24 options:

a)	A general reserve for inventory obsolescence of $13,000.

b)	$1,100 for the cost of uniforms with the company logo provided to the local peewee soccer team.

c)	An accounts receivable allowance of $4,600 for three accounts determined by specifically identifying accounts that may not be collectable.

d)	A $50,000 contribution to the company-sponsored defined contribution pension plan (equal to the pension expense reported for the year).

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Question 25 (1 point)

CBV Ltd. had net income for accounting purposes before taxes of $200,000 for the current year ended December 31. The following amounts were deducted in determining this amount:
·         $25,000 for an estimated contingent liability related to a lawsuit
·         $21,500 in allowances paid to commissioned salespersons for entertaining clients
·         $980 for late payment of property taxes
The capital cost allowance claim is equal to depreciation deducted in the income statement. Determine the company’s net income for tax purposes for the current year.

Question 25 options:

a)

$235,750

b)

$225,000

c)

$211,730

d)

$225,980

Answer 1

24. Option C: An accounts receivable allowance of $4,600 for three accounts determined by specifically identifying accounts that may not be collectible.

Schedule 1 - The purpose of this schedule to provide the reconciliation between Accounting Income and Taxable Income.

25. Option A: $235,750

Net income for accounting purposes before taxes	200,000.00
Contingent liability	25,000.00
Allowances paid to commissioned salespersons(50%)	10,750.00
Net income for tax purposes	235,750.00

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