Question

In: Accounting

Camila purchased the following items for her customers: ten gift baskets at $28 per basket, 500...

Camila purchased the following items for her customers: ten gift baskets at $28 per basket, 500 pens with her name on them for $135, and two football tickets with a face value of $58 each. Camila did not attend the football game, but instead gave the two football tickets to two clients. Camila is electing to deduct the two football tickets as business gifts. What is the total of the deductible expenses?

Solutions

Expert Solution

Gift Baskets: The general rule of IRS allows your business to deduct up to $25 for business gifts you give to any one person per year. Further there is no limit on how many people you can give business gifts to during the year, nor on how much you spend for those gifts, although your business gift deduction is limited to $25 per recipient.

Therefore from ten gift baskets of $28 per basket, deduction will be available upto $25 per basket, i e; $250 ($25 x 10).

Pens: In case the business is providing customers and clients small promotional items such as: pen, plasstic bag, key chains,etc, that costs $4 or less and have your name or company's name clearly and permanently imprinted on them may be deducted without any limitation. In the given case the cost of per pen is $3.70 (500 / $135) and Camila's name is imprinted on that pen.

Therefore the total amount of $135 will be deductible.

Football ticket: If you give the tickets and do not attend the event yourself, you can choose whether to declare the tickets a gift, subject to the $25 limitation, or entertainment expense. In the given case, Camila is considering the same as a business risk, hence $25 per ticket is deducted i.e; $50.

Total deductible expenses will be = $250 + $135 + $50 = $435


Related Solutions

Basket of Goodies is positioning itself as an upscale manufacturer of gourmet gift baskets through the...
Basket of Goodies is positioning itself as an upscale manufacturer of gourmet gift baskets through the introduction of several production baskets as well as custom options. BOG will achieve this positioning by leveraging their competitive advantages. The competitive advantage is based on two factors, low overhead which supports reasonable prices, and an unrelenting desire for the highest quality product and service. 1. Overhead- BOG's overhead is particularly low because it is a home based business. Most of BOG's competition is...
You're putting together gift baskets for a silent auction. The total value of the items in...
You're putting together gift baskets for a silent auction. The total value of the items in each basket must be $150 or less. The values of the available items are $90, $70, $110, $50, $30, $80, $120, $20, $100, $100, $60, $40, $70, $40, $90, $120, $60, $40, $80, and $110. (a) If you pack the items in the order listed above using the first fit algorithm, how many baskets will you make? ____ baskets (b) If you pack the...
Y received stock as a gift from her father in 2019. Her father purchased the stock...
Y received stock as a gift from her father in 2019. Her father purchased the stock several years ago of $30,000. The stock was worth $20,000 at the time the gift was received. Y sold the stock for $18,000 in 2020. How much gain or loss, if any, should Y report on her 2020 tax return? Assume the same facts as above, except that Y sold the stock for $25,000. How much gain or loss, if any, should Y report...
The manager of the local Walmart Superright is studying the number of items purchased by customers...
The manager of the local Walmart Superright is studying the number of items purchased by customers in the evening hours. Listed below is the number of items for a sample of 30 customers. 15 8 6 9 9 4 18 10 10 12 12 4 7 8 12 10 10 11 9 13 5 6 11 14 5 6 6 5 13 5 a. mean and median (Round "Mean" to 1 decimal place.) b. find the range and the standard...
Marisa Williams runs a retail grocery store and purchases items for resale to her customers. She...
Marisa Williams runs a retail grocery store and purchases items for resale to her customers. She is facing an ordering decision about how much of a particular item to purchase at one time.. in order t take advantage of supplier discounts (if it makes sense to do so). Demand = 36,000 units per year order cost = $25 per order Carrying cost = $0.45 per unit purchasing price = $0.85 Discount price= $0.82 (if buy a minimun of 6,000 units...
Question: A Whole Foods cashier recorded the number of items purchased by 12 consecutive customers: 12  ...
Question: A Whole Foods cashier recorded the number of items purchased by 12 consecutive customers: 12   25   32   17   22   19   16   25   18   24   18   23 a)    For this data set, find the mean, median, and mode. Show your calculations. Round answers to the nearest tenth. b)   Which of these averages best represents the data? Explain your answer.
Sarah sells tulips at her store and charges her customers $12 per dozen. She sells 20...
Sarah sells tulips at her store and charges her customers $12 per dozen. She sells 20 dozen each day.   The tulips that Sarah orders to sell in her store cost $216 total for 240 tulips. Based on this information, the profit total that Sarah would make if she were able to sell all of the tulips, sold in bouquets at $12 per dozen, would be __________.
The purchase schedule for Marin and Associates is as follows: Date Items Purchased Cost per Item...
The purchase schedule for Marin and Associates is as follows: Date Items Purchased Cost per Item March 15 6,300 $1.30 July 30 9,500 1.50 December 17 6,600 1.60 Total 22,400 The inventory balance as of the beginning of the year was $15,400 (15,400 units at $1), and an inventory count at year-end indicated that 11,300 items were on hand. Sales and operating expenses (excluding cost of goods sold) totaled $52,500 and $10,400, respectively. The federal income tax is 30 percent...
Dahlia is in the 28 percent tax rate bracket and has purchased the following shares of...
Dahlia is in the 28 percent tax rate bracket and has purchased the following shares of Microsoft common stock over the years: Date Purchased Shares Basis 7/10/2007 400 $ 12,000 4/20/2008 300 10,750 1/29/2009 500 12,230 11/02/2011 250 7,300 If Dahlia sells 800 shares of Microsoft for $40,000 on December 20, 2017, what is her capital gain or loss in each of the following assumptions? (Do not round intermediate calculations.) a. She uses the FIFO method. b. She uses the...
You purchased 500 shares in A Limited on 1 January 2015 for $85 per share. Now,...
You purchased 500 shares in A Limited on 1 January 2015 for $85 per share. Now, assume that the stock pays an annual dividend of $12 per share. On 31 December 2015, the market price is $91 per share. What is your total dollar return for the year? A. $3 000 B. $6 000 C. $9 000 D. $45 500
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT