review_ex_2_spring_2010_solution

review_ex_2_spring_2010_solution - Solution to Ch2 HW

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TAX 5015 (Spring 2010) – Chapter review exercise #2 Topic review: Corporations – Taxable income Due date: January 27/28, 2010 Name(s): SOLUTION . Brady Corporation reported the following information for 2009: Bad debt expense 29,135 Decrease in balance of allow for doubtful accounts 4,552 Charitable contributions 11,653 Cost of goods sold 524,425 Dividend revenue (from a 15% owned domestic corporation) 58,269 Dividends paid 36,418 Interest revenue - City of Foxboro bonds 12,200 Interest revenue - U.S. Treasury bonds 23,306 Key-man life insurance premiums 4,187 Key-man life insurance proceeds received 82,147 Long-term capital loss 69,922 MACRS cost recovery 58,269 Straight line depreciation expense (used for book purposes) 30,954 Meals and entertainment 40,060 Other expenses 125,642 Salary expense 547,987 Salary expense - shareholders/employees 43,811 Sales 1,484,118 Short-term capital gain 60,454 Warranty expense 56,437 Increase in estimated product warranty liability 6,434 Brady also has a $15,600 NOL carry forward from 2007 and a $5,000 of charitable contribution carry forward from 2008.
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[a] Compute Brady's 2009 taxable income. Taxable income
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This note was uploaded on 02/03/2010 for the course ACG Tax 5015 taught by Professor Kelliher during the Spring '10 term at University of Central Florida.

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review_ex_2_spring_2010_solution - Solution to Ch2 HW

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