prob029 - Problem 29 (Past exam question: 45 minutes)...

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Problem 29 (Past exam question: 45 minutes) (Text: Chs. 4-8, 11, 17) Ever EZ Ltd. is a CCPC which carries on business in Canada. All of the issued shares are owned by Mr. EZ. The income statement for the year ended December 31, 2008 is as follows: Ever EZ Ltd Income Statement For the Year Ended December 31, 2008 Sales $3,000,000 Cost of sales 800,000 Gross profit 2,200,000 Selling and administrative expenses 1,200,000 Operating income 1,000,000 Other income and expenses 56,000 Income before income taxes $ 944,000 During the audit of Ever EZ Ltd., which took place in August 2008, the following information was obtained. 1. Selling and administrative expenses include the following: Salesperson bonuses based on 2008 sales, not paid as at the time of the audit $200,000 Management bonuses, not paid as at the time of the audit: Mr. EZ $300,000 Mr. Jack, the controller, not related to Mr. EZ 100,000 400,000 Club membership fees and dues: Golf club annual dues for Mr. EZ $ 2,000 Golf club annual dues for the sales manager 1,500 Community service club membership for the sales manager 200 Fitness club membership for the controller 800 4,500 Travel expenses for which the salesmen were reimbursed: Meals $ 8,000 Accommodation 6,000 Air fare 13,000 27,000 Entertainment expenses for which the salesmen were reimbursed:
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prob029 - Problem 29 (Past exam question: 45 minutes)...

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