Ken Gray runs a small proprietorship (Ken's Fish)which specializes in fishing gear.He has provided you with the following information:
(*All closing 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 you with the following information:
  (*All closing 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 Canadian.S.19 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),(3)The 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,therefore,it is not an allowable deduction.S.20(10) C)The Income Tax Act requires that closing 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 as per these provisions,which could affect the balance of 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 Canadian.S.19
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),(3)The 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,therefore,it is not an allowable deduction.S.20(10)
C)The Income Tax Act requires that closing 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 as per these provisions,which could affect the balance of 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