VB Corporation reported a net loss of $50,000 for accounting purposes.Items included in the loss are golf dues amounting to $3,000,meals and entertainment totalling $10,000,CCA of $10,000,depreciation of $5,000,warranty expenses of $8,000 and warranty expenditures of $6,000.VB's taxable income is:
A) ($45,000)
B) ($51,000).
C) ($57,000).
D) ($58,000).

Question

Quizplus · Accepted Answer

Golf dues, meals and entertainment are not deductible for tax purposes. CCA and depreciation are added back to the loss. Warranty expenses are deductible, but warranty expenditures are not.Taxable income = Net loss + Golf dues + Meals and entertainment - CCA - Depreciation + Warranty expenses - Warranty expenditures= -$50,000 + $3,000 + $10,000 - $10,000 - $5,000 + $8,000 - $6,000= -$45,000

VB Corporation Reported a Net Loss of $50,000 for Accounting