Problem 9-45 (LO. 6) Stork Associates paid $60,000 for a 20-seat skybox at Veter

Question

Problem 9-45 (LO. 6)

Stork Associates paid $60,000 for a 20-seat skybox at Veterans Stadium for eight professional football games. Regular seats to these games range from $80 to $250 each. At one game, an employee of Stork entertained 18 clients. Stork furnished food and beverages for the event at a cost of $1,300. The game was preceded by a bona fide business discussion, and all expenses are adequately substantiated.

a. Stork can deduct $ for this event.

b. If there was no bona fide business discussion either preceding or after the event, there is and the deduction would be $.

Explanation / Answer

a)Total entertainment expense=(20*250)+1300=6300

The deduction is 50% of it and it i s50%*6300=3150

b) In this case we can not take the ticket cost and the meal expense for deduction and the only thing that can be considered is business expense

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.