This preview shows page 1. Sign up to view the full content.
Unformatted text preview: n that had
1,000,000 shares of stock outstanding (Ral had no portfolio indebtedness)
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...
View Full Document
- Fall '10
- The Land