CMP Ltd is a big mining company that only mines coal. Recently the coal price has fallen
Question:
Required: Advise CMP regarding the deductibility of the $40 million.
Lara works as an employee real estate agent for a large real estate business. One day she drove from the office to a client's house, but on the way there got into a minor accident with another car that was driven by a retiree. The police found that Lara was using her mobile phone at the time of the accident, which was against the law. She subsequently had to pay a government fine of $1,000, as well as $3,000 for the damage to the retiree's car (insurance would not cover her). Her accountant is unsure whether the expenditure for the $3,000 of damage has a sufficient nexus with her income-earning activities. Required: Advise Lara as to the deductibility of the $1,000 fine.
The $3,000 amount is payable to the retiree.
Auditing The Art And Science Of Assurance Engagements
ISBN: 9780136692089
15th Canadian Edition
Authors: Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Chris E. Hogan, Joanne C. Jones