Ken Gray runs a small proprietorship (Ken's Fish)which specializes in fishing gear. He has provided the following information:

(*All inventory is valued at market value.)Required:

Question

Ken Gray runs a small proprietorship (Ken's Fish)which specializes in fishing gear. He has provided the following information:
 
 (*All inventory is valued at market value.)Required:

Quizplus · Accepted Answer

The Answer is A)

A) B)Omitted items: · Advertising in an American newspaper is not deductible when the targeted market is Canadia · Half of the meals and entertainment are not deductible. S 67.1 · Property taxes on vacant land is only deductible to the extent that income is earned. S.18(2), ( amount can be added to the cost base of the land. · Recreational fees are not permitted as deductions. S.18(1)(l) · The convention is not within the territorial scope of the organization hosting the conference, t it is not an allowable deduction. S.20(10) C)The Income Tax Act requires that inventories be valued at either: 1) the lower of cost or market value of each item, or 2) market value of all items of inventory. Ken would need to value his inventory at the lower of cost or market, which could affect the ba the company's cost of goods sold and net income for tax purposes.

B)Omitted items:
· Advertising in an American newspaper is not deductible when the targeted market is Canadia
· Half of the meals and entertainment are not deductible. S 67.1
· Property taxes on vacant land is only deductible to the extent that income is earned. S.18(2), ( amount can be added to the cost base of the land.
· Recreational fees are not permitted as deductions. S.18(1)(l)
· The convention is not within the territorial scope of the organization hosting the conference, t it is not an allowable deduction. S.20(10)
C)The Income Tax Act requires that inventories be valued at either:
1) the lower of cost or market value of each item, or
2) market value of all items of inventory.

Ken would need to value his inventory at the lower of cost or market, which could affect the ba the company's cost of goods sold and net income for tax purposes.

Ken Gray Runs a Small Proprietorship (Ken's Fish)which Specializes in Fishing