Greyon Inc. operates an active business. Financial statements for the year ended December 3 1 , 2
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Question:
Greyon Inc. operates an active business. Financial statements for the year ended December
report a net income before taxes of $ The following additional information is provided:
Greyons net income is summarized as follows:
Income from business operations $
Gain on sale of capital assets
Interest on a bond investment
Income from Financial Statements $
During the year Greyon completed construction of a new warehouse building and its cost of $
was added to the balance sheet. The cost consists of the following:
Building construction $
Heating and cooling systems
Landscaping of grounds
$
Greyons balance sheet includes an amount for goodwill acquired from a previous business acquisition.
During the year, a goodwill impairment loss of $ was deducted from the income from business
operations.
Legal expenses, deducted in arriving at income from business operations, include $ for drafting
the mortgage document for the new warehouse, $ to investigate a zoning limitation on the new
warehouse site, and $ for the audit fee.
A management bonus of $ was announced and accrued in September. The bonus was paid in
two equal installments on January and April of the following year,
Advertising and promotion includes $ for airing a TV commercial, $ for production of the
TV commercial, $ for club memberships in a sportsrelated facility to enhance business contacts
and $ for acquiring a permanent mailing list for seeking new customers.
The income statement for the year ended December includes the following items:
Amortization $
Charitable donations
Volume rebates and discounts on purchases
Architects fee for design of new warehouse building
Capital cost allowance has been correctly calculated as $
Required:
Determine Greyons Net Income from Business for tax purposes for the taxation year.
Determine Greyons Net Income for Tax Purposes for the taxation year
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
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