Choices a b and d are incorrect per the above

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Unformatted text preview: n that had 1,000,000 shares of stock outstanding (Ral had no portfolio indebtedness) $1,000 Loss on sale of investment in stock of unaffiliated corporation (this stock had been held for two years; Ral had no other capital gains or losses) (5,000) Keyman insurance premiums paid on Budd's life (Ral is the beneficiary of this policy) 3,000 Group term insurance premiums paid on $10,000 life insurance policies for each of Ral's four employees (the employees' spouses are the beneficiaries) 4,000 Amortization of cost of acquiring a perpetual dealer's franchise (Ral paid $48,000 for this franchise on July 1, 1989, and is amortizing it over a 48-month period) 6,000 Contribution to a recognized, qualified charity (this contribution was authorized by Ral's board of directors in December 1989, to be paid on January 31, 1990) 75,000 On December 1, 1989, Ral received advance rental of $27,000 from a tenant for a three-year lease commencing January 1, 1990 to cover rents for the years 1990, 1991, and 1992. In conformity with GAAP, Ral did not include any part of this rental...
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