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What is the amount of magnus taxable income

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Question - Magnus Corporation has $120,000 of revenues for the year. They also have the following expenses during the year:

Cost of Goods Sold: $15,000

Business Meals Expense: $6,000

Speeding Tickets: $7,000

Salaries: $20,000

1. What is the amount of Magnus' Taxable Income [hint: Corporate taxable income= Gross Income minus Allowable Deductions]?

a. $72,000

b. $75,000

c. $79,000

d. $82,000

2. Which one of the following costs is most likely NOT fully deductible?

a. Jose, a local business owner, pays $30,000 in Self-Employment taxes.

b. Sandra owns a mini golf course. She pays her employer portion of payroll taxes because of her employees, which totals to $12,000.

c. Travis owns a CPA firm and pays his son Joe as an associate. Joe is a CPA and is paid the same salary as the other associates.

d. X-Corp writes off a $12,000 business debt owed by Sam because he has not responded to their numerous requests for payment.

Reference no: EM133046916

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